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Aayush Jindal

Key Highlights

  • GBP/USD started an upside correction above the 1.1940.
  • It broke a major bearish trend line with resistance near 1.1895 on the 4-hours chart.
  • EUR/USD might also rise if there is a clear move above 1.0280.
  • Gold price is facing an uphill task near the $1,740 zone.

GBP/USD Technical Analysis

The British Pound started an upside correction from the 1.1900 zone against the US Dollar. GBP/USD is back above 1.1900 but now faces many key hurdles.

Looking at the 4-hours chart, the pair was able to climb above the 1.1920 and 1.1940 resistance levels. There was a break above a major bearish trend line with resistance near 1.1895. It opened the doors for a move 50% Fib retracement level of the downward move from the 1.2333 swing high to 1.1759 low.

The pair is trading above 1.2000 level and the 100 simple moving average (red, 4-hours). However, it is facing resistance near the 1.2100 level and the 200 simple moving average (green, 4-hours).

The 61.8% Fib retracement level of the downward move from the 1.2333 swing high to 1.1759 low is also acting as a resistance. A close above the 1.2100 level could open the doors for a steady increase.

The next major resistance could be near the 1.2150 level, above which the pair could rise to 1.2250. If there is no upside break, the pair could correct lower and dip below 1.2000.

The next major support is 1.1950, below which the pair could resume its decline. In the stated case, the pair might decline towards the 1.1850 level.

Looking at EUR/USD, the pair is also attempting a recovery wave and might gain pace if there is a move above the 1.0280 level.

Economic Releases

  • US New Home Sales for June 2022 (MoM) – Forecast 5.5% versus 10.7% previous.
  • Richmond Fed Manufacturing Index for July 2022 - Forecast -14, versus -11 previous.