GBP/USD Gaining Strength Above 1.272008 January, 2019 by Aayush Jindal in Market Analysis
- The British Pound broke the key 1.2680 and 1.2720 resistances against the US Dollar.
- There was a break above a short term bearish trend line at 1.2740 on the 4-hours chart of GBP/USD.
- The US ISM Non-Manufacturing Index in Dec 2018 declined from 60.7 to 57.6.
- Today in the US, the Trade Balance figure for Nov 2018 will be released, which is forecasted to post a deficit of $54.0B.
GBPUSD Technical Analysis
After a massive decline, the British Pound recovered nicely from the 1.2400 support against the US Dollar. The GBP/USD pair jumped above the 1.2600, 1.2680 and 1.2720 resistance levels.
Looking at the 4-hours chart, the pair reversed almost all its losses and traded above the 1.2720 resistance levels. There was a proper close above the 1.2700 handle, 100 simple moving average (red, 4-hours), and the 200 SMA (green, 4-hours).
The pair even broke the 61.8% Fib retracement level of the last decline from the 1.2814 high to 1.2391 low. Recently, there was a break above a short term bearish trend line at 1.2740.
Overall, the pair is back in a positive zone above the 1.2720 level and the 76.4% Fib retracement level of the last decline from the 1.2814 high to 1.2391 low. Therefore, there are high chances of more gains above the 1.2800 and 1.2810 levels in the near term.
On the other hand, if there is a downside correction, the previous resistance near 1.2720 and the 200 SMA are likely to act as strong supports.
Recently in the US, the ISM Non-Manufacturing Index for Dec 2018 was released by the Institute for Supply Management (ISM). The market was looking for a decline from the last reading of 60.7 to 59.0.
However, the result was even disappointing as the decline in the ISM Non-Manufacturing Index was more than 2 points and the index dropped to 57.6.
Both EUR/USD and GBP/USD gained traction this week and it seems like there could be more upsides in the coming sessions.
Economic Releases to Watch Today
- Euro Zone Consumer Confidence Dec 2018 – Forecast -6.2, versus -6.2 previous.
- Euro Zone Services Sentiment Dec 2018 – Forecast 12.2, versus 13.3 previous.
- US Trade Balance Nov 2018 – Forecast $-54.0B, versus $-55.5B previous.
- US Consumer Credit Change Nov 2018 – Forecast $18.00B, versus $25.38B previous.