GBP/USD Trading Near Make-or-Break Levels21 January, 2020 by Aayush Jindal in Market Analysis
- GBP/USD remained in a bearish zone below the 1.3100 pivot area.
- A key bearish trend line is forming with resistance near 1.3050 on the 4-hours chart.
- The UK Claimant count could change 24.5K in Dec 2019, down from the last 28.8K.
- The ILO Unemployment Rate is likely to remain stable at 3.8%.
GBP/USD Technical Analysis
This month, GBP/USD faced an increase in selling pressure below 1.3250. As a result, the British Pound declined steadily and it recently broke the key 1.3100 support area against the US Dollar.
Looking at the 4-hours chart, the pair settled below a couple of important supports near 1.3100., 1.3080, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
The pair even broke the 1.3000 handle, plus the 76.4% Fib retracement level of the last major upward move from the 1.2904 low to 1.3283 high.
Therefore, there is a risk of more downsides towards the last swing low of 1.2904. If GBP/USD slides further, it could test the 1.2820 support since it is near the 1.236 Fib extension level of the last major upward move from the 1.2904 low to 1.3283 high.
On the upside, the pair is facing a strong resistance near 1.3040, 1.3050, and the 100 SMA. Besides, there is a key bearish trend line forming with resistance near 1.3050.
A successful close above the trend line, 1.3050, and the 100 SMA is needed to start a fresh increase towards the 1.3100 and 1.3150 levels.
Overall, GBP/USD is struggling and it could either decline heavily below 1.2900 or start a decent recovery towards 1.3150 in the coming days.
Upcoming Economic Releases
- UK Claimant Count Change Dec 2019 – Forecast 24.5K, versus 28.8K previous.
- UK ILO Unemployment Rate Nov 2019 (3M) – Forecast 3.8%, versus 3.8% previous.
- German ZEW Economic Sentiment Index for Jan 2020 – Forecast 15, versus 10.7 previous.