(function() { var didInit = false; function initMunchkin() { if(didInit === false) { didInit = true; Munchkin.init('105-GAR-921'); } } var s = document.createElement('script'); s.type = 'text/javascript'; s.defer = true; s.src = '//munchkin.marketo.net/munchkin.js'; s.onreadystatechange = function() { if (this.readyState == 'complete' || this.readyState == 'loaded') { initMunchkin(); } }; s.onload = initMunchkin; document.getElementsByTagName('head')[0].appendChild(s); })(); (function(h,o,t,j,a,r){ h.hj=h.hj||function(){(h.hj.q=h.hj.q||[]).push(arguments)}; h._hjSettings={hjid:1422437,hjsv:6}; a=o.getElementsByTagName('head')[0]; r=o.createElement('script');r.defer=1; r.src=t+h._hjSettings.hjid+j+h._hjSettings.hjsv; a.appendChild(r); })(window,document,'https://static.hotjar.com/c/hotjar-','.js?sv=');

GBP/USD Could Bounce Back, 1.2150 Holds Key

Aayush Jindal

Aayush Jindal

Key Highlights

  • The British Pound climbed above 1.2200, butfailed near 1.2300 against the US Dollar.
  • GBP/USD may well find bids near 1.2180, 1.2150,and a bullish trend line on the 4-hours chart.
  • The US Durable Goods Orders jumped 2.1% in July2019, more than the +1.1% forecast.
  • The US Consumer Confidence (CB) could declinefrom 135.7 to 129.5 in August 2019.

GBP/USD Technical Analysis

After a strong decline, the British Pound found support near 1.2030 against the US Dollar. The GBP/USD pair started an upside correction and traded above the 1.2200 resistance area.

GBP/USD Technical Analysis British Pound US Dollar

Looking at the 4-hours chart, the pair settled nicely abovethe 1.2150 pivot level and the 100 simple moving average (red, 4-hours). Itopened the doors for more upsides above the 1.2200 and 1.2250 levels.

The pair even climbed above the 1.2280 level, but it faced astrong resistance near the 200 simple moving average (green, 4-hours).Moreover, there is a major bearish trend line forming with resistance near1.2360 on the same chart.

At the outset, the pair is correcting lower below 1.2280 and1.2250. There was a break below the 38.2% Fib retracement level of the recentwave from the 1.2108 low to 1.2292 high.

However, there are many important supports on the downsidenear 1.2180, 1.2160, and the 50% Fib retracement level of the recent wave fromthe 1.2108 low to 1.2292 high. Additionally, there is a connecting bullishtrend line in place with support at 1.2150 on the same chart.

Therefore, the pair could find a solid buying interest nearthe 1.2150-1.2160 area. As long as GBP/USD is above 1.2150, it could bounceback towards the 1.2300 resistance. Conversely, a downside break below 1.2150will most likely push the pair back towards 1.2050.

Fundamentally, the US Durable Goods Orders report for July2019 was released by the US Census Bureau. The market was looking for a 1.1% risein orders compared with the previous month.

The actual result was well above the forecast, as there wasa 2.1% rise in orders. On the other hand, the US Durable Goods Orders exTransportation declined 0.4%, whereas the market was looking for a 0.1% rise.

The report added:

Excluding defense, new orders increased 1.4 percent. Transportation equipment, also up two consecutive months, drove the increase, $5.7 billion or 7.0 percent to $86.3 billion.

To sum up, GBP/USD could bounce back as long as it is above 1.2150, but EUR/USD might continue to face hurdles near 1.1160, 1.1180 and 1.1200.

Upcoming Economic Releases

  • German Gross Domestic Product for Q2 2019 (YoY)– Forecast 0%, versus 0% previous.
  • German Gross Domestic Product for Q2 2019 (QoQ)– Forecast -0.1%, versus -0.1% previous.
  • US Consumer Confidence August 2019 - Forecast 129.5,versus 135.7 previous.