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GBP/USD Could Recover If It Reclaims 1.2400

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Aayush Jindal

Key Highlights

  • GBP/USD extended its decline below the 1.2440 support.
  • A key bearish trend line is forming with resistance near 1.2380 on the 4-hour chart.
  • EUR/USD remains at risk of more downsides toward 1.0650.
  • Crude oil price is consolidating above the $70 support.

GBP/USD Technical Analysis

The British started a fresh decline from well above 1.2500 against the US Dollar. GBP/USD traded below the 1.2440 and 1.2400 support levels.

Looking at the 4-hour chart, the pair settled below the 1.2400 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

The bears even attempted a break below the 1.2300 level. A low is formed near 1.2309 and the pair is now consolidating losses. Immediate support is near the 1.2300 level. The next major support is near the 1.2280 level.

If there is a downside break below the 1.2280 support, the pair could decline toward the 1.2200 support level. The next major support sits near the 1.2150 level.

On the upside, the pair might face resistance near the 1.2380 level. There is also a key bearish trend line forming with resistance near 1.2380 on the same chart. The next major resistance is near 1.2400, above which the pair could rise toward the 1.2500 level.

Looking at crude oil price, there was a bearish reaction below the $73.85 support before the price started a consolidation phase.

Economic Releases

  • US Housing Price Index for March 2023 (MoM) - Forecast +0.3%, versus +0.5% previous.
  • Dallas Fed Manufacturing Business Index for May 2023 - Forecast -19.6, versus -23.4 previous.
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