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GBP/USD Could Extend Losses, UK Employment Report Next

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD started a downside correction from the 1.2280 zone.
  • It traded below a key bullish trend line with support near 1.2110 on the 4-hours chart.
  • EUR/USD started a downside correction after it failed to clear 1.0365.
  • The UK Claimant count could change -32K in July 2022.

 

GBP/USD Technical Analysis

The British Pound cleared the 1.2150 resistance against the US Dollar. GBP/USD surpassed the 1.2200 resistance zone before the bears appeared.

Looking at the 4-hours chart, the pair even spiked above the 1.2250 level. However, the pair failed to gain strength to clear the 1.2300 resistance. A high was formed near 1.2276 before there was a downside correction.

There was a move below the 1.2220 and 1.2200 levels. The bears pushed the pair below the 50% Fib retracement level of the upward move from the 1.2003 swing low to 1.2276 high.

Besides, it traded below a key bullish trend line with support near 1.2110 on the same chart. The pair even broke the 1.2100 level and the 100 simple moving average (red, 4-hours). Finally, it tested the 1.2050 support and the 200 simple moving average (green, 4-hours).

On the downside, there is a decent support forming near 1.2020 level. The main support is now forming near the 1.2000 level. A downside break below the 1.2000 support might push the pair in a negative zone.

The next major support is near the 1.1935 level. Any more losses might send the pair towards the 1.1880 zone. On the upside, the pair is facing resistance near the 1.2140 level.

The next major resistance is near the 1.2170 level. A clear move above the 1.2170 resistance might send the pair higher towards the 1.2250 level. The next major resistance is 1.2275, above which the pair could accelerate higher. In the stated case, the pair could rise towards the 1.2350 resistance zone in the near term.

Looking at EUR/USD, the pair started a downside correction below the 1.0280 support and there might be a move towards the 1.0120 support.

Economic Releases

  • UK Claimant Count Change for July 2022 – Forecast -32.0K, versus -20.0K previous.
  • UK ILO Unemployment Rate for June 2022 (3M) – Forecast 3.8%, versus 3.8% previous.
  • Canadian Consumer Price Index for July 2022 (MoM) – Forecast +0.1%, versus +0.7% previous.
  • Canadian Consumer Price Index for July 2022 (YoY) – Forecast +7.6%, versus +8.1% previous.