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GBP/USD Could Recover If Bulls Clear This Hurdle

Key Highlights

  • GBP/USD retested the key 1.1920 support zone.
  • A major bearish trend line is forming with resistance near 1.2060 on the 4-hours chart.
  • EUR/USD is attempting a recovery wave above the 1.0600 resistance zone.
  • Gold price is struggling to stay above the $1,800 support.


GBP/USD Technical Analysis

The British Pound started a fresh decline from well above 1.2100 against the US Dollar. GBP/USD traded below the 1.2000 support to enter a bearish zone.

Looking at the 4-hours chart, the pair settled below the 1.2050 support level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

Finally, it retested the key 1.1920 support zone. A low was formed near 1.1922 and the pair recently started an upside correction. There was a wave above the 1.1950 and 1.2000 resistance levels.

GBP/USD spiked above the 50% Fib retracement level of the downward move from the 1.2147 swing high to 1.1922 low. On the upside, an immediate resistance is near the 1.2060 level.

There is also a major bearish trend line forming with resistance near 1.2060 on the same chart. The next major resistance is near the 1.2100 level. A clear move above the 1.2100 resistance might start a steady increase.

The next target could be near the 1.2200 level and the 200 simple moving average (green, 4-hours). Any more gains could open the doors for a move towards the 1.2280 level.

On the downside, an immediate support is near the 1.1950 level. The next major support is near the 1.1920 level, below which there is a risk of a move towards the 1.1850. Any more losses could open the doors for a drop towards 1.1720.

Looking at EUR/USD, the pair tested the 1.0535 zone and recently corrected higher. It is now facing hurdles near the 1.0640 and 1.0650 levels.

Economic Releases

  • US Housing Price Index for Dec 2023 (MoM) - Forecast -0.6%, versus -0.1% previous.
  • Canadian Gross Domestic Product for Q4 2022 – Forecast -0.2%, versus +0.7% previous.