GBP/USD Sets New Yearly Low, Settles Below 1.300007 August, 2018 by Aayush Jindal in Market Analysis
- The British Pound declined heavily and traded to a new yearly low below 1.2940 against the US Dollar.
- There is a major bearish trend line in place with resistance at 1.3085 on the 4-hours chart of GBP/USD.
- The Euro Zone Sentix Investor Confidence Index increased from 12.1 to 14.7 in August 2018.
- Today, the US IBD/TIPP Economic Optimism Index for August 2018 will be released, which is forecasted to increase from 56.4 to 57.2 (MoM).
GBPUSD Technical Analysis
The British Pound failed to move past the 1.3150 and 1.3200 resistance levels against the US Dollar. As a result, the GBP/USD pair declined heavily and broke the 1.3000 and 1.2980 support levels.
Looking at the 4-hours chart, the pair even broke the last swing low at 1.2957 and traded to a new yearly low. The next stop for sellers could be the 1.236 Fib extension level of the last wave from the 1.2957 low to 1.3213 high 1.2897.
Below 1.2897 and 1.2895, the pair could decline further towards the 1.2850 and 1.2800 support levels. On the upside, an initial resistance awaits near the 1.3000 level.
More importantly, there is a major bearish trend line in place with resistance at 1.3085 on the same chart. The trend line and the 1.3080 resistance are close to the 100 simple moving average (red, 4-hours).
Therefore, any major recoveries above 1.3000 are likely to face a lot of selling interest near 1.3080-85. Overall, the past few sessions were super bullish for the US Dollar as EUR/USD also fell sharply and tested the 1.1520 support area.
Moreover, dips in USD/JPY remained well bid and the pair may perhaps break the 111.80 and 112.00 resistances in the coming days.
Economic Releases to Watch Today
- Germany’s Industrial Production for June 2018 (MoM) – Forecast -0.5%, versus +2.6% previous.
- Germany’s Trade Balance for June 2018 – Forecast €20.1B, versus €20.3B previous.
- Germany’s Imports of goods and services June 2018 – Forecast +0.2%, versus +0.7% previous.
- Germany’s Exports of goods and services June 2018 – Forecast -0.4%, versus +1.8% previous.
- US IBD/TIPP Economic Optimism Index for August 2018 (MoM) – Forecast 57.2, versus 56.4 previous.
- Canada’s Ivey PMI July 2018 – Forecast 64.2, versus 63.1 previous.