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GBP/USD Eyes More Upsides Above 1.4200

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD corrected lower, but it remained supported above 1.4100.
  • A key bullish trend line is forming with support near 1.4060 on the 4-hours chart.
  • EUR/USD remained well bid above the 1.2150 support zone.
  • Gold price is stable above $1,850, while crude oil price climbed higher above $65.00.

 

GBP/USD Technical Analysis

This past week, the British Pound gained strength above 1.4100 against the US Dollar. GBP/USD climbed further above 1.4200 before it started a downside correction.

Looking at the 4-hours chart, the pair traded as high as 1.4233 before starting a downside correction. There was a break above the 1.4200 level, but the pair remained well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

It broke the 1.4150 support and tested the 1.4100 zone. It seems like there is a decent support forming near the 1.4150 level. There is also a key bullish trend line forming with support near 1.4060 on the same chart.

The next major support is near the 1.4040 level and the 100 simple moving average (red, 4-hours). Any more losses might call for a test of the 1.3920 support.

On the upside, the pair is facing hurdles near 1.4200 and 1.4230. A clear break above the 1.4230 zone is likely to set the pace for a move towards the 1.4300 and 1.4320 levels.

Looking at EUR/USD, the pair is stable above the 1.2150 support and it is likely to aim a break above the 1.2250 level in the near term.

Economic Releases

  • German IFO Business Climate Index for May 2021 – Forecast 98.1, versus 96.8 previous.
  • German Gross Domestic Product for Q1 2021 (YoY) – Forecast -3.0%, versus -3.0% previous.
  • German Gross Domestic Product for Q1 2021 (QoQ) – Forecast -1.7%, versus -1.7% previous.
  • US New Home Sales for April 2021 (MoM) – Forecast +8% versus +20.7% previous.