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GBP/USD is Approaching Crucial Resistance

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Aayush Jindal

Key Highlights

  • The British Pound started a new upside wave and traded above 1.3800 against the US Dollar.
  • There is a crucial bearish trend line forming with resistance at 1.3980 on the 4-hours chart of GBP/USD.
  • The US Factory orders declined 1.4% in Jan 2018, more than the forecast of -1.3%.
  • The US Trade Balance figure for Jan 2018 will be released today, which is forecasted to register a deficit of $-55.1B.

GBPUSD Technical Analysis

The British Pound found a strong support near 1.3700 against the US Dollar, and recovered. The GBP/USD pair traded higher recently and moved above 1.3800.The current price action is positive above 1.3800, but the pair is facing a major resistance on the upside near 1.3980.

GBPUSD Technical Analysis British Pound US Dollar

Looking at the 4-hours chart, there was a support base formed at 1.3711 and the pair moved above the 23.6% Fib retracement level of the last decline from the 1.4072 high to 1.3711 low.The last few candles are positive, but there is a crucial bearish trend line forming with resistance at 1.3980 on the same chart. Moreover, the 76.4% Fib retracement level of the last decline from the 1.4072 high to 1.3711 low is at 1.3987.Moreover, the 200 simple moving average (green, 4-hour) is also near 1.3980. Therefore, it won’t be easy for buyers to break the 1.3980 resistance area.On the downside, supports are seen at 1.3820 and 1.3800. Below 1.3800, the pair may retest the 1.3750 support.Recently, the US Factory orders report for Jan 2018 was released by the US Census Bureau. The market was looking for a decline of 1.3% in orders compared with the previous month.The result was disappointing, as there was a decline of 1.4% in orders, which was a lot worse than the last revised reading of +1.8%.Overall, there was a minor increase in the bearish pressure on the US Dollar, which may continue to help pairs such as EUR/USD and GBP/USD.

Economic Releases to Watch Today

  • Euro Zone Gross Domestic Product Q4 2017 (QoQ) - Forecast 0.6%, versus 0.6% previous.
  • BoC Interest Rate Decision – Forecast 1.25%, versus 1.25% previous.
  • US ADP Employment Change Feb 2018 - Forecast 195K, versus 234K previous.
  • US Trade Balance Jan 2018 - Forecast $-55.1B, versus $-53.1B previous.
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