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GBP/USD Breaks Key Resistance, 1.4000 Presents Challenge

Key Highlights

  • GBP/USD started a fresh increase and cleared the key 1.3880 resistance.
  • It broke a major bearish trend line with resistance near 1.3860 on the 4-hours chart.
  • EUR/USD extended its upward move above the 1.2000 resistance.
  • The UK ILO Unemployment rate could rise from 5% to 5.1% in Feb 2021 (3M).


GBP/USD Technical Analysis

As discussed earlier, the British Pound formed a double bottom pattern near 1.3670 against the US Dollar. As a result, GBP/USD started a steady increase and broke many hurdles near 1.3850.

Looking at the 4-hours chart, the pair cleared a major bearish trend line with resistance near 1.3860. There was also a close above the 1.3880 resistance zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair climbed above the 1.3900 level, and it surpassed the last swing high at 1.3918. It has opened the doors for more gains above the 1.236 Fib extension level of the key decline from the 1.3918 high to 1.3668 low.

The main resistance is now near the 1.4000 level. A successful close above the 1.4000 level will most likely clear the path for a move towards the 1.4120 and 1.4150 levels.

If there is a downside correction, the pair could find support near 1.3900. The next major support is near 1.3880, and then at 1.3825 or the 200 simple moving average (green, 4-hours).

Overall, GBP/USD is showing a lot of positive signs above 1.3880 and 1.3900. Besides, EUR/USD also extended its rise and it broke the 1.2000 resistance.

Economic Releases

  • UK Claimant Count Change March 2021 – Forecast 8K, versus 86.6K previous.
  • UK ILO Unemployment Rate Feb 2021 (3M) – Forecast 5.1%, versus 5.0% previous.