GBP/USD Recovers, But Upsides Could Be Limited
- GBP/USD started an upside correction from the 1.3800 support zone.
- It could face a strong resistance near 1.4000 on the 4-hours chart.
- EUR/USD is struggling to recover above 1.1950.
- Crude oil price remains elevated and it broke the $72.00 resistance.
GBP/USD Technical Analysis
The British Pound declined heavily below the 1.4000 support against the US Dollar. GBP/USD even traded below the 1.3850 support level before it started an upside correction.
Looking at the 4-hours chart, the pair traded as low as 1.3786. It settled well below the 1.4000 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Recently, the pair started an upside correction above 1.3800. It broke the 23.6% Fib retracement level of the key decline from the 1.4132 high to 1.3786 low. An immediate resistance on the upside is near the 1.3960 level.
The 50% Fib retracement level of the key decline from the 1.4132 high to 1.3786 low is also near the 1.3960 level. The main resistance is near the 1.4000 level, where the bears are likely to take a stand.
On the downside, the 1.3800 level is a decent support. Any more losses could open the doors for a drop towards the 1.3720 level in the near term.
Looking at EUR/USD, the pair stayed above 1.1840, but it is likely to face resistance near 1.1950 and 1.2000. Conversely, crude oil price is gaining pace and it is likely to continue higher above $73.00.
- US Existing Home Sales for May 2021 (MoM) - Forecast -1.0%, versus -2.7% previous.
- Fed's Chair Powell testifies.