GBP/USD Reaches Crucial Juncture, 1.3050 Holds The Key
- GBP/USD found support near 1.2860 and recovered nicely above 1.2950.
- A key bullish trend line is forming with support near 1.2910 on the 4-hours chart.
- EUR/USD remained stable above 1.1700 and it recovered above 1.1750.
- Gold price is still struggling to gain momentum above the $1,920 resistance.
GBP/USD Technical Analysis
After a couple of failed attempts near 1.3065, the British Pound declined sharply against the US Dollar. GBP/USD declined below 1.2900, but it found a strong support near 1.2860.
Looking at the 4-hours chart, the pair traded as low as 1.2862 and recently started a fresh upward move. It surpassed the 1.2920 and 1.2950 resistance levels. There was also a break above the 50% Fib retracement level of the downward move from the 1.3064 swing high to 1.2862 swing low.
The pair even spiked above the 1.3000 resistance, the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours). However, it is facing a couple of important hurdles near 1.3050.
The main resistance is still near 1.3065, above which GBP/USD is likely to resume its upward move. The next stop for buyers could be 1.3120 or even 1.3155.
Conversely, the pair could trim gains and decline again. On the downside, there is a key bullish trend line forming with support near 1.2910. A clear break below 1.2910 and 1.2900 could start an extended decline towards the 1.2860 support zone or even 1.2820.
Overall, GBP/USD is reaching a crucial juncture and it could either rally above 1.3065 and reverse gains. Looking at EUR/USD, there was no downside break below 1.1680 and the pair recovered sharply above 1.1750.
Upcoming Economic Releases
- US Housing Starts Sep 2020 (MoM) – Forecast 1.450M, versus 1.416M previous.
- US Building Permits Sep 2020 (MoM) – Forecast 1.505M, versus 1.476M previous.