GBP/USD Could Continue To Rise In Near Term26 February, 2019 by Aayush Jindal in Market Analysis
- The British Pound started a solid upward move above the 1.2920 resistance against the US Dollar.
- There was a break above a significant bearish trend line with resistance at 1.2930 on the 4-hours chart of GBP/USD.
- The Chicago Fed National Activity Index (CFNAI) declined from 0.05 to -0.43 in Jan 2019.
- The US Housing Starts for Dec 2018 will be released today, which could change -0.5%.
GBPUSD Technical Analysis
The British Pound formed a solid support above 1.2800 and later climbed higher against the US Dollar. The GBP/USD pair gained pace above 1.2920 and moved into a positive zone above 1.3000.
Looking at the 4-hours chart, the pair traded above the 1.2990 pivot area and the 61.8% Fib retracement level of the last decline from the 1.3217 high to 1.2772 low. More importantly, the pair settled above the 1.3000 resistance and the 100 (red) simple moving average (4-hours).
On the upside, an initial resistance is near the 1.3120 level and the 76.4% Fib retracement level of the last decline from the 1.3217 high to 1.2772 low. Above 1.3120, the pair could test the 1.3140-1.3150 resistance area.
On the other hand, if there is a downside correction, the pair may find bids above the 1.3020 level. The main support is near the 1.3000 zone and the 100 (red) simple moving average (4-hours).
Fundamentally, the Chicago Fed National Activity Index (CFNAI) for Jan 2019 was released recently. The market was looking for a minor decline from the last reading of 0.27 to 0.21.
However, the result was disappointing as the index fell sharply to -0.43. Moreover, the last reading was revised down from 0.27 to 0.05.
Overall, GBP/USD pair could continue to move higher in the near term towards 1.3150 and 1.3200. If it corrects lower, buyers will most likely defend the 1.3000 support area.
Economic Releases to Watch Today
- Germany’s GfK Consumer Confidence for March 2019 – Forecast 10.8, versus 10.8 previous.
- US Housing Starts Dec 2018 (MoM) – Forecast 1.253M, versus 1.256M previous.
- US Building Permits Dec 2018 (MoM) – Forecast 1.290M, versus 1.322M previous.
- S&P/Case-Shiller Home Price Indices for Dec 2018 (YoY) – Forecast +4.5%, versus +4.7% previous.