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GBP/USD Facing Uphill Task Near 1.3400

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD is facing a strong resistance near the 1.3400 region.
  • A key bullish trend line is in place with support near 1.3310 on the 4-hours chart.
  • EUR/USD extended its rise above 1.1950, while gold price traded below $1,780.
  • The US ISM Manufacturing Index (to be released today) could decline from 59.3 to 57.5 in Nov 2020.

 

GBP/USD Technical Analysis

The British Pound faced a strong resistance near 1.3400 against the US Dollar. GBP/USD corrected lower after two rejections, but dips were limited below 1.3300.

Looking at the 4-hours chart, the pair formed a high near the 1.3397 level before it corrected lower. There was a break below the 1.3340 support, but the pair remained well above the 200 simple moving average (green, 4-hours) and the 100 simple moving average (red, 4-hours).

A low was formed near 1.3287 and the pair is currently trading in a range. There is also a key bullish trend line in place with support near 1.3310 on the same chart. If there is a downside break below the trend line support and 1.3300, there is a risk of more downsides.

The next major support sits at 1.3280, below which the pair could decline towards the 1.3240 and 1.3220 support levels.

Conversely, the pair could make another attempt to clear the 1.3400 resistance. If it succeeds, there could be a steady rise towards the 1.3450 and 1.3480 levels in the coming sessions.

Looking at EUR/USD, the pair remained in a positive zone and it even climbed above the 1.1950 resistance. Conversely, gold price extended its decline below the $1,780 support level. The next key support is near the $1,750 level.

Upcoming Economic Releases

  • Germany’s Manufacturing PMI Nov 2020 - Forecast 58.0, versus 57.9 previous.
  • Euro Zone Manufacturing PMI Nov 2020 – Forecast 54.4, versus 53.6 previous.
  • Euro Zone CPI Nov 2020 (YoY) (Prelim) - Forecast -0.2%, versus -0.3% previous.
  • Euro Zone Core CPI Nov 2020 (YoY) (Prelim) - Forecast +0.2%, versus +0.2% previous.
  • UK Manufacturing PMI Nov 2020 – Forecast 55.2, versus 55.2 previous.
  • US Manufacturing PMI Nov 2020 – Forecast 56.7, versus 56.7 previous.
  • US ISM Manufacturing Index Nov 2020 – Forecast 57.5, versus 59.3 previous.