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GBP/USD: Resistance Turned Support At 1.1600

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD was able to clear the 1.1600 and 1.1700 resistance levels.
  • A key bullish trend line is forming with support near 1.1600 on the 4-hours chart.
  • EUR/USD started a consolidation phase below the 1.0350 resistance.
  • Gold price is showing signs of more gains above $1,770.

 

GBP/USD Technical Analysis

The British Pound formed a base above the 1.1150 level against the US Dollar. GBP/USD started a steady increase and was able to settle above the 1.1500 resistance.

Looking at the 4-hours chart, the pair gained bullish momentum above the 1.1600 resistance, the 100 simple moving average (red, 4-hours) plus the 200 simple moving average (green, 4-hours).

The upward move was such that the pair even climbed above the 1.1700 and 1.1750 levels. It traded as high as 1.1854 before there was a minor downside correction. An initial support is near the 1.1650 level.

The next major support is near the 1.1620 zone. The main support sits at 1.1600. There is also a key bullish trend line forming with support near 1.1600 on the same chart. A close below the 1.1600 level might start another strong decline. In the stated case, GBP/USD could decline towards the 1.1250 support.

On the upside, an immediate resistance is near 1.1850 level. The next major resistance may perhaps be near 1.1920. Any more gains could set the pace for a move towards the 1.2000 level, above which it could even test 1.2150.

Looking at gold price, the bulls seem to be in control and they might aim more gains above the $1,770 level in the coming sessions.

Economic Releases

  • UK Claimant Count Change for Oct 2022 – Forecast -12.6K, versus +25.5K previous.
  • UK ILO Unemployment Rate for Sep 2022 (3M) – Forecast 3.5%, versus 3.5% previous.
  • Euro Zone Gross Domestic Product Q3 2022 (Preliminary) (QoQ) - Forecast 0.2%, versus 0.2% previous.