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GBP/USD Trading Near Make-or-Break Support

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Aayush Jindal

Key Highlights

  • The British Pound declined recently below the1.3050 support against the US Dollar.
  • A key bullish trend line is forming with supportat 1.2948 on the 4-hours chart of GBP/USD.
  • There are many resistances on the upside near 1.2975,1.3020, 1.3050 and 1.3060.
  • The UK Claimant Count in April 2019 could change24.2K, less than the last 28.3K.

GBPUSD Technical Analysis

After trading towards the 1.3180 resistance, the British Pound started a significant downward move against the US Dollar. The GBP/USD pair broke the 1.3140 and 1.3060 support levels to move into a bearish zone.

GBPUSD Technical Analysis British Pound US Dollar Chart

Looking at the 4-hours chart, the pair broke the 1.3050level and the 200 simple moving average (green, 4-hours). The decline was suchthat the pair even traded below the 1.3000 handle and the 100 simple movingaverage (4-hours, red).

A weekly low was formed at 1.2941 and the pair recentlyrecovered a few pips, but it stayed well below 23.6% Fib retracement level ofthe major drop from the 1.3176 high to 1.2941 low.

On the upside, it seems like the 1.3050 level and the 200simple moving average (green, 4-hours) are strong resistances along with the38.2% Fib retracement level of the major drop from the 1.3176 high to 1.2941 low.

If there is an upside break above the 1.3030 and 1.3050levels, GBP/USD could recover towards the 1.3100 and 1.3120 levels.

On the downside, there is a crucial support near 1.2950 anda key bullish trend line 1.2948 on the same chart. If there is a downside breakbelow the trend line, the pair could retest the 1.2875 swing low. The next keysupports are near 1.2845 and 1.2820.

On the other hand, there was a decent recovery in EUR/USD above 1.1220 and it seems like it could extend gains towards 1.1300 in the coming sessions.

Economic Releases to Watch Today

  • German Consumer Price Index April 2019 (YoY) –Forecast +2.0%, versus +2.0% previous.
  • German Consumer Price Index April 2019 (MoM) –Forecast +1.0%, versus +1.0% previous.
  • UK Claimant Count Change April 2019 – Forecast 24.2K,versus 28.3K previous.
  • UK ILO Unemployment Rate March 2019 (3M) –Forecast 3.9%, versus 3.9% previous.
  • German ZEW Economic Sentiment Index May 2019 –Forecast 5.0, versus 3.1 previous.
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