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GBP/USD Eyes Key Upside Break above 1.4250

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD is consolidating gains above the 1.4100 support zone.
  • It is facing a few important hurdles near 1.4220 and 1.4250 on the 4-hours chart.
  • EUR/USD could climb higher if it breaks the 1.2200 resistance zone.
  • Crude oil price touched a new multi-month high near the $70.00 level.

 

GBP/USD Technical Analysis

The British Pound remained well bid above the 1.4080 level against the US Dollar. GBP/USD formed a base above 1.4100 and it started a fresh increase.

Looking at the 4-hours chart, the pair traded as low as 1.4083 before a fresh increase. The pair settled nicely above the 1.4100 level and the 200 simple moving average (green, 4-hours).

There was a break above the 1.4150 level and the 100 simple moving average (red, 4-hours). The pair even climbed above the 50% Fib retracement level of the downward move from the 1.4250 high to 1.4083 low.

The first key resistance is near the 1.4180 level and the 1.4200 region. A clear upside break above the 1.4200 zone could open the doors for a fresh test of 1.4250.

A successful break above 1.4250 could set the pace for a larger increase. If not, there is a risk of a fresh decline towards the 1.4100 support. The next major support is near the 1.4080 level, below which the pair could test 1.4000 and the 100 SMA.

Overall, GBP/USD is likely to rise further if it breaks the 1.4200 resistance. Similarly, EUR/USD could gain traction above 1.2200.

Economic Releases

  • German ZEW Business Economic Sentiment Index for June 2021 – Forecast 85.3, versus 84.4 previous.
  • Euro Zone Gross Domestic Product for Q1 2021 (QoQ) - Forecast -0.6%, versus -0.6% previous.
  • Euro Zone Gross Domestic Product for Q1 2021 (YoY) - Forecast -1.8%, versus -1.8% previous.
  • US Goods and Services Trade Balance for April 2021 - Forecast $-69B, versus $-74.4B previous.