GBP/USD Turned Positive Above 1.320026 June, 2018 by Aayush Jindal in Market Analysis
- The British Pound found strong bids near 1.3100 and recovered above 1.3200 against the US Dollar.
- There was a break above a bearish trend line with resistance at 1.3235 on the 4-hours chart of GBP/USD.
- The Chicago Fed National Activity Index (CFNAI) declined in May 2018 from the last revised reading of 0.42 to -0.15.
- Today in the UK, CBI Industrial Trends Survey Realized figure for June 2018 will be released, which is forecasted to post 10% (MoM).
GBPUSD Technical Analysis
The British Pound managed to hold the 1.3100-10 support and bounced back against the US Dollar. The GBP/USD pair broke the 1.3180 and 1.3200 resistance levels to move back in a positive zone.
Looking at the 4-hours chart, the pair was successful in climbing above the 50% Fib retracement level of the last decline from the 1.3446 high to 1.3102 low. During the upside, there was a break above a bearish trend line with resistance at 1.3235 on the same chart.
However, the pair faced a major hurdle near the 1.3315 level and the 100 simple moving average (red, 4-hours). The 61.8% Fib retracement level of the last decline from the 1.3446 high to 1.3102 low also acted as a resistance.
The pair dipped slightly, but the decline was protected by the 1.3230 support zone. It seems like the pair may perhaps trade in a range above 1.3200 for some time before making the next move.
A break above 1.3315 is needed for a push above the 1.3350 level. The next resistance is near 1.3385 and the 200 simple moving average (green, 4-hours).
On the downside, supports are seen at 1.3230 and 1.3200. Below this last, the pair could move back in a bearish zone.
Recently in the US, the Chicago Fed National Activity Index (CFNAI) for May 2018 was released by the Federal Reserve Bank of Chicago. The market was looking for a decline in the index from the last reading of 0.34 to 0.09.
However, the actual result was disappointing as there was a sharp decline from the last revised reading of 0.42 to -0.15. It weighed on the US Dollar and helped pairs like EUR/USD and GBP/USD.
Economic Releases to Watch Today
- UK’s CBI Industrial Trends Survey Realized June 2018 (MoM) – Forecast 10%, versus 11% previous.
- S&P/Case-Shiller Home Price Indices for April 2018 (YoY) – Forecast +6.8%, versus +6.8% previous.