GBP/USD Correcting Gains But Remains Well Supported15 October, 2019 by Aayush Jindal in Market Analysis
- GBP/USD started a downside correction from the 1.2700 resistance.
- There are many supports near the 1.2500 and 1.2420 levels.
- The UK Claimant Count could change 27.9K in Sep 2019, less than the last 28.2K.
- EUR/USD is holding an important support area near the 1.1000 level.
GBP/USD Technical Analysis
This past week, there was a sharp increase in the British Pound from the 1.2200 support against the US Dollar. GBP/USD rallied more than 500 pips and it is currently correcting gains from the 1.2700 resistance.
Looking at the 4-hours chart, the pair broke a crucial bearish trend line near 1.2270 to start the last major rally. Moreover, it settled above 1.2400 and the 100 simple moving average (red, 4-hours).
It traded as high as 1.2706 and recently started a downside correction. It traded below the 1.2600 support area, plus broke the 23.6% Fib retracement level of the upward move from the 1.2195 low to 1.2706 high.
However, there are many key supports, starting with the 1.2500 area (the previous resistance). Moreover, the 38.2% Fib retracement level of the upward move from the 1.2195 low to 1.2706 high could provide support near 1.2510.
The main support is near the 1.2420 and 1.2400 levels (the previous breakout resistance). As long as the pair is holding the 1.2400 support area, it is likely to start a fresh increase in the near term.
On the upside, an immediate resistance is near the 1.2620 area. If the bulls gain momentum above 1.2620, GBP/USD could revisit the 1.2700 resistance area in the coming days.
Looking at EUR/USD, the pair is still holding the key 1.1000 support area. However, it must gain traction above 1.1065 to avoid a bearish reaction in the near term.
Upcoming Economic Releases
- UK Claimant Count Change Sep 2019 – Forecast 27.9K, versus 28.2K previous.
- UK ILO Unemployment Rate Aug 2019 (3M) – Forecast 3.8%, versus 3.8% previous.
- German ZEW Business Economic Sentiment for Oct 2019 – Forecast -27.3, versus -22.5 previous.