GBP/USD At Risk of Downside Break Below 1.3000
- GBP/USD is showing a few bearish signs below the 1.3080 pivot level.
- It is struggling to stay above the main 1.3000 support level.
- The UK Claimant count changed 94.4K in July 2020, more than the 10K forecast.
- The UK GDP could contract 20.5% in Q2 2020 (Preliminary) (QoQ).
GBP/USD Technical Analysis
This past week, the British Pound made a few attempts to clear the 1.3180 resistance against the US Dollar. However, GBP/USD failed to gain strength and recently corrected lower.
Looking at the 4-hours chart, the pair topped near 1.3183 and declined below the 1.3120 support zone. The pair even traded below the 50% Fib retracement level of the upward move from the 1.2981 swing low to 1.3183 high.
It is now trading below the 1.3080 pivot level and struggling to stay above a major contracting triangle support at 1.3030 on the 4-hours chart.
If there is a downside break below the 1.3020 and 1.3000 support levels, the pair could extend its decline. The next major support is seen near the 1.2950 level and the 100 simple moving average (red, 4-hours).
Any further losses below the 100 SMA could accelerate the decline towards the 1.2850 support level in the near term. On the upside, an initial resistance is near the 1.3080 level, but the main resistance is still near the 1.3150 and 1.3180 levels.
A successful break above the 1.3180 resistance could open the doors for more upsides above the 1.3240 and 1.3260 levels.
Looking at EUR/USD, the pair is approaching a major support zone at 1.1700, below which it could also decline sharply in the coming sessions.
Upcoming Economic Releases
- UK GDP Q2 2020 (Preliminary) (QoQ) - Forecast -20.5%, versus -2.2% previous.
- US Consumer Price Index July 2020 (MoM) – Forecast +0.3%, versus +0.6% previous.
- US Consumer Price Index July 2020 (YoY) – Forecast +0.8%, versus +0.6% previous.
- US Consumer Price Index Ex Food & Energy July 2020 (YoY) – Forecast +1.1%, versus +1.2% previous.