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GBP/USD Might Face Hurdles Near 1.3700

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Aayush Jindal

Key Highlights

  • GBP/USD started an upside correction from the 1.3400 zone.
  • A key bearish trend line is forming with resistance near 1.3610 on the 4-hours chart.
  • EUR/USD is still trading below the 1.1680 resistance zone.
  • The US ISM Services Index could decline from 61.7 to 60.0 in Sep 2021.

GBP/USD Technical Analysis

The British Pound found support near 1.3400 against the US Dollar. GBP/USD started a fresh increase and it broke the 1.3500 resistance zone.

Looking at the 4-hours chart, the pair traded as low as 1.3411 before it started a steady recovery. There was a break above the 23.6% Fib retracement level of the downward move from the 1.3913 swing high to 1.3411 low.

It is now trading near a key bearish trend line with resistance near 1.3610 on the same chart. The first key resistance is near the 1.3660 level.

The 50% Fib retracement level of the downward move from the 1.3913 swing high to 1.3411 low is also near 1.3660. The next major resistance is near 1.3700, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

A close above 1.3700 could set the pace for a larger increase. An initial support on the downside is near the 1.3570 level. The next key support is near 1.3520, below which the pair may possibly continue lower. In the stated case, the price could test the 1.3420 level.

Looking at EUR/USD, the pair started an upside correction, but it is likely to face a major hurdle near the 1.1680 region in the near term.

Economic Releases

  • Germany’s Services PMI for Sep 2021 - Forecast 56.0, versus 56.0 previous.
  • Euro Zone Services PMI for Sep 2021 – Forecast 56.3, versus 56.3 previous.
  • UK Services PMI for Sep 2021 – Forecast 54.6, versus 54.6 previous.
  • US Services PMI for Sep 2021 – Forecast 54.4, versus 54.4 previous.
  • US ISM Services Index for Sep 2021 – Forecast 60.0, versus 61.7 previous.
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