GBP/USD Recovery Could Face Many Hurdles14 August, 2018 by Aayush Jindal in Market Analysis
- The British Pound declined sharply below the 1.2950 support against the US Dollar.
- There are two bearish trend lines in place with resistance at 1.2820 and 1.3010 on the 4-hours chart of GBP/USD.
- The pair could correct higher, but it is likely to face sellers near 1.2800 and 1.2850.
- Today, the UK Claimant Count Change figure for June 2018 will be released, which is forecasted to post 3.8K.
GBPUSD Technical Analysis
The British Pound tumbled this past week below the 1.2950 and 1.2800 support levels against the US Dollar. The GBP/USD traded as low as 1.2722 and it is currently consolidating in a range below 1.2800.
Looking at the 4-hours chart, the pair fell significantly after forming a top near the 1.3150 level. It dropped more than 400 pips and settled below 1.2800 plus the 100 simple moving average (4-hour, red).
It traded as low as 1.2722 and is currently consolidating losses. An initial resistance is around the 1.2780-1.2800 area. It coincides with the 38.2% Fib retracement level of the last decline from the 1.2973 high to 1.2722 low.
Moreover, there are two bearish trend lines in place with resistance at 1.2820 and 1.3010 on the same chart. Above the first trend line, the 50% Fib retracement level of the last decline from the 1.2973 high to 1.2722 low at 1.2848 could act as a resistance.
Therefore, if the pair corrects higher, it may perhaps face many hurdles near the 1.2800, 1.2845 and 1.2900 resistance levels.
On the downside, the recent low of 1.1367 is an initial support. A break below 1.2700-20 could accelerate declines towards the 1.2500 level in the near term.
Economic Releases to Watch Today
- UK Claimant Count Change June 2018 – Forecast 3.8K, versus 7.8K previous.
- UK ILO Unemployment Rate June 2018 (3M) – Forecast 4.2%, versus 4.2% previous.
- German Consumer Price Index for July 2018 (YoY) – Forecast +2.0%, versus +2.0% previous.
- German Consumer Price Index for July 2018 (MoM) – Forecast +0.4%, versus +0.4% previous.
- Euro Zone Gross Domestic Product Q2 2018 (Preliminary) (QoQ) – Forecast 0.3%, versus 0.3% previous.
- US NFIB Business Optimism Index July 2018 – Forecast 106.9, versus 107.2 previous.