GBP/USD Consolidates, Why Recovery Won’t Be Easy
- GBP/USD corrected losses from the 1.2000 support zone.
- A crucial bearish trend line is forming with resistance near 1.2190 on the 4-hours chart.
- EUR/USD is also facing a key resistance near 1.0520.
- The UK Services PMI could remain stable at 53.4 in June 2022.
GBP/USD Technical Analysis
The British Pound started a fresh decline from the 1.2400 resistance zone against the US Dollar. GBP/USD traded below the 1.2200 support zone to move into a bearish zone.
Looking at the 4-hours chart, the pair settled below the 1.2150 level, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
The pair even traded below the 1.2050 support and spiked below 1.2000. A low was formed near 1.1977 and the pair recently corrected some losses. There was a move above the 1.2020 and 1.2050 levels.
The pair climbed above the 23.6% Fib retracement level of the downward move from the 1.2406 swing high to 1.1977 low. On the upside, the pair is facing resistance near the 1.2200 zone. There is also a crucial bearish trend line forming with resistance near 1.2190 on the same chart.
The trend line is near the 50% Fib retracement level of the downward move from the 1.2406 swing high to 1.1977 low. A close above the 1.2200 zone, trend line, and the 100 simple moving average (red, 4-hours) could start a recovery wave.
If not, GBP/USD might start a fresh decline below 1.2100. On the downside, the 1.2050 level is a decent support. The main support sits near the 1.2000 level. A downside break below the 1.2000 support could send the pair further lower. The next major support sits near the 1.1925 zone, below which the bears could aim 1.1800.
Looking at EUR/USD, the pair is facing a major hurdle near the 1.0520. If there is no upside break, the pair may perhaps start another decline towards 1.0365.
- Germany’s Services PMI for June 2022 - Forecast 52.4, versus 52.4 previous.
- Euro Zone Services PMI for June 2022 – Forecast 52.8, versus 52.8 previous.
- UK Services PMI for June 2022 – Forecast 53.4, versus 53.4 previous.