Can GBP/USD Move Past 1.3400?05 June, 2018 by Aayush Jindal in Market Analysis
- The British Pound recovered recently and moved above the 1.3300 resistance against the US Dollar.
- There was a break above a key bearish trend line with resistance at 1.3310 on the 4-hours chart of GBP/USD.
- The UK Construction PMI in May 2018 remained at 52.5 versus the forecast of 52.0.
- Today in the US, the US Services PMI for May 2018 will be released, which is forecasted to remains at 55.7.
GBPUSD Technical Analysis
The British Pound was rejected from the 1.3200 support area against the US Dollar. The GBP/USD pair climbed higher and broke a few key hurdles, including 1.3300 and 1.3350.
During the upside move, the pair broke the 23.6% Fib retracement level of the last decline from the 1.3608 high to 1.3204 low. More importantly, there was a break above a key bearish trend line with resistance at 1.3310 on the 4-hours chart.
It opened the gates for more gains above the 1.3350 level. However, there are a few important resistances near the 1.3410 level and the 100 (red) simple moving average (4-hour).
Additionally, the 50% Fib retracement level of the last decline from the 1.3608 high to 1.3204 low at 1.3406 is also a major barrier for buyers. A successful close above 1.3400 and the 100 SMA is needed for further upsides towards 1.3500.
On the flip side, the broken resistance near 1.3310 and 1.3300 are likely to act as supports if the pair corrects lower.
Recently in the UK, the Construction PMI for May 2018 was released by the Chartered Institute of Purchasing & Supply and Markit Economics. The market was looking for a decline in the PMI from the last reading of 52.5 to 52.0.
However, the actual result was above the forecast as there was no decline in the PMI from 52.5. 8. The outcome was positive and it helped GBP/USD to stay in a positive zone above 1.3300.
Economic Releases to Watch Today
- Germany’s Services PMI for May 2018 – Forecast 52.1, versus 52.1 previous.
- Spanish Services PMI for May 2018 – Forecast 56.1, versus 55.6 previous.
- Euro Zone Services PMI for May 2018 – Forecast 53.9, versus 53.9 previous.
- US Services PMI for May 2018 – Forecast 55.7, versus 55.7 previous.
- US ISM Non-Manufacturing Index for May 2018 – Forecast 57.5, versus 56.8 previous.