GBP/USD Basing Above 1.3460 For Next Move15 May, 2018 by Aayush Jindal in Market Analysis
- The British Pound declined this past week before finding buyers near 1.3460 against the US Dollar.
- There was a break above a crucial bearish trend line with resistance at 1.3520 on the 4-hour chart of GBP/USD.
- The pair may continue to consolidate above 1.3460 before the next move.
- Today, the UK Claimant Count Change for April 2018 will be released, which is forecasted to post 7.5K.
GBPUSD Technical Analysis
The British Pound declined heavily this past week and broke the 1.3800 and 1.3700 support levels against the US Dollar. The GBP/USD pair traded as low as 1.3461, and later started consolidating losses.
The pair is currently trading in a range and it recently tested the 23.6% Fib retracement level of the last decline from the 1.3998 high to 1.3461 low. During the recent upside, there was a break above a crucial bearish trend line with resistance at 1.3520 on the 4-hour chart of GBP/USD.
The pair is currently trading nicely above the 1.3460 pivot level with positive signs. On the upside, the pair faces a major hurdle near 1.3720 and the 50% Fib retracement level of the last decline from the 1.3998 high to 1.3461 low.
The 1.3700/20 area is close to the 100 simple moving average (red), which may act as a strong barrier for buyers should the pair continues to move higher.
A proper break and close above 1.3700/20 is needed for a bullish continuation. On the flip side, the 1.3460 support zone must hold to prevent further slides. Below 1.3460, the pair could test 1.3400 in the near term.
Economic Releases to Watch Today
- German Gross Domestic Product for Q1 2018 (YoY) (Preliminary) – Forecast 1.7%, versus 2.3% previous.
- German Gross Domestic Product for Q1 2018 (QoQ) (Preliminary) – Forecast 0.4%, versus 0.6% previous.
- German ZEW Business Economic Sentiment Index for March 2018 – Forecast -8.2, versus -8.2 previous.
- UK Claimant Count Change April 2018 – Forecast 7.5K, versus 11.6K previous.
- UK ILO Unemployment Rate March 2018 (3M) – Forecast 4.2%, versus 4.2% previous.
- UK Average Earnings Including Bonus March 2018 (3Mo/Year) – Forecast +2.6%, versus +2.8% previous.
- US Retail Sales April 2018 (MoM) – Forecast +0.3%, versus +0.6% previous.