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GBP/USD Consolidates Below 1.4000, Risk of More Losses

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Aayush Jindal

Key Highlights

  • GBP/USD traded below the 1.4000 support and it even declined to 1.3780.
  • A major bearish trend line is forming with resistance near 1.3900 on the 4-hours chart.
  • EUR/USD accelerated losses below the 1.1900 support zone.
  • Gold price extended its decline below the $1,700 support zone.

GBP/USD Technical Analysis

After forming a short-term top near 1.4250, the British Pound started a fresh decline. GBP/USD broke the key 1.4000 support zone to move into a bearish zone.

Looking at the 4-hours chart, the pair even settled below the 1.4000 level and the 100 simple moving average (red, 4-hours). There was also a break below the 1.3800 support and the 200 simple moving average (green, 4-hours).

A low was formed near 1.3778 before it started consolidating losses. On the upside, the pair is facing hurdles near the 1.3880 and 1.3900 levels.

There is also a major bearish trend line forming with resistance near 1.3900 on the same chart. A clear break above trend line and then a follow up move above 1.4000 is must for a fresh increase.

If not, there are chances of more losses below the 1.3770 and 1.3750 levels. The next major support is near the 1.3710 level.

Looking at EUR/USD, the pair failed to correct higher and it extended its decline below the 1.1900 support. Similarly, gold price extended its decline below $1,700.

Economic Releases

  • Euro Zone Gross Domestic Product Q4 2020 (QoQ) - Forecast -0.6%, versus -0.6% previous.
  • Euro Zone Gross Domestic Product Q4 2020 (YoY) - Forecast -5%, versus -5% previous.
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