GBP/USD Recovery Above 1.3050 Looks Real24 July, 2018 by Aayush Jindal in Market Analysis
- The British Pound recovered nicely from the 1.2958 low against the US Dollar.
- There is a major bearish trend line in place with resistance at 1.3190 on the 4-hours chart of GBP/USD.
- The US Existing Home Sales in June 2018 declined 0.6%, whereas the market was looking for a 0.5% rise.
- The US Manufacturing PMI for July 2018 (Prelim) will be released today, which is forecasted to remain at 55.4.
GBPUSD Technical Analysis
The British Pound was under pressure this past week below 1.3100 against the US Dollar. The GBP/USD pair declined below the 1.3000 support before buyers took a stand near 1.3160.
Looking at the 4-hours chart, the pair formed a low near 1.2958 and started a recovery. It bounced back above the 1.3050 resistance and the 38.2% Fib retracement level of the last decline from the 1.3292 high to 1.2958 low.
However, the pair is now facing a crucial resistance near the 1.3190-1.3200 zone. There is also a major bearish trend line in place with resistance at 1.3190 on the same chart.
The 100 simple moving average (red, 4-hours) is positioned near the trend line at 1.3185. Above the trend line, the next resistance is at 1.3213 and the 76.4% Fib retracement level of the last decline from the 1.3292 high to 1.2958 low.
Once the pair closes above the 1.3220 resistance and the 200 SMA (green, 4-hou), there could be more gains towards 1.3300. On the other hand, if the pair declines from the current levels, it may perhaps find support near 1.3050 and 1.3010.
Recently in the US, the Existing Home Sales report for June 2018 was released by the National Association of Realtors. The market was looking for a rise of 0.5% in sales compared with the previous month.
The actual result was disappointing as there was a decline of 0.6% in the US Existing Home Sales. Moreover, the last reading was revised from -0.4% to -0.7%. However, there was no major impact on the US Dollar and GBP/USD corrected a few points lower.
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for July 2018 (Preliminary) – Forecast 55.5, versus 55.9 previous.
- Germany’s Services PMI for July 2018 (Preliminary) – Forecast 54.3, versus 54.5 previous.
- Euro Zone Manufacturing PMI July 2018 (Preliminary) – Forecast 54.7, versus 54.9 previous.
- Euro Zone Services PMI for July 2018 (Preliminary) – Forecast 55.0, versus 55.2 previous.
- US Manufacturing PMI for July 2018 (Preliminary) – Forecast 55.4, versus 55.4 previous.
- US Services PMI for July 2018 (Preliminary) – Forecast 56.5, versus 56.5 previous.