GBP/USD Facing Key Resistance Near 1.310009 October, 2018 by Aayush Jindal in Market Analysis
- The British Pound corrected higher, but it failed to hold gains above 1.3100 against the US Dollar.
- There was a failed attempt to break a bearish trend line with current resistance at 1.3095 on the 4-hours chart of GBP/USD.
- The Euro Zone Sentix Investor Confidence in Oct 2018 declined from 12.0 to 11.4.
- Today, the NFIB Business Optimism Index for Sep 2018 will be released, which is forecasted to increase to 108.9.
GBPUSD Technical Analysis
After trading as low as 1.2921, the British Pound started an upside correction against the US Dollar. The GBP/USD pair climbed above the 1.3000 and 1.3050 levels, but it failed to hold gains above 1.3100.
Looking at the 4-hours chart, the pair recovered nicely above the 1.3050 resistance and the 50% Fib retracement level of the last drop from the 1.3217 high to 1.2921 low.
The pair even broke the 200 simple moving average (green, 4-hours) and 1.3075. However, the pair struggled to settle above the 1.3100-1.3110 resistance area. There was also a failed attempt to break a bearish trend line with current resistance at 1.3095.
The pair was rejected from the 61.8% Fib retracement level of the last drop from the 1.3217 high to 1.2921 low. It moved down once again, but there is a good support formed near 1.3000. If the pair fails to stay above 1.3000, it could decline towards a connecting bullish trend line with support at 1.2940.
On the upside, the pair has to settle above the trend line, 1.3100, and the 100 simple moving average (red, 4-hours) to gain bullish momentum towards 1.3150 and 1.3200 in the coming days.
On the other hand, the EUR/USD pair remained under a lot of pressure as it fell below the 1.1500 support level. The next major support on the downside awaits at 1.1420.
Economic Releases to Watch Today
- US NFIB Business Optimism Index Sep 2018 – Forecast 108.9, versus 108.8 previous.
- US IBD/TIPP Economic Optimism Index for Oct 2018 (MoM) – Forecast 54.6, versus 55.7 previous.
- Germany’s Trade Balance for August 2018 – Forecast €16.4B, versus €15.8B previous.