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GBP/USD: Resistance Turned Support Near 1.3800

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Aayush Jindal

Key Highlights

  • EUR/USD started a steady increase above the key 1.3800 resistance zone.
  • A major rising channel is forming with support near 1.3820 on the 4-hours chart.
  • EUR/USD corrected gains after it tested the 1.1900 resistance.
  • The Euro Zone GDP could contract 0.6% in Q2 2021 (QoQ).

GBP/USD Technical Analysis

The British Pound started a steady increase from the 1.3600 region against the US Dollar. GBP/USD broke the 1.3720 resistance to move into a positive zone.

Looking at the 4-hours chart, the pair gained pace after it broke the 1.3750 and 1.3800 resistance levels. There was also a close above 1.3800, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

A high was formed near 1.3892 and the pair is now correcting gains. An immediate support is near 1.3820 or the 23.6% Fib retracement level of the upward move from the 1.3602 swing low to 1.3892 high.

There is also a major rising channel forming with support near 1.3820 on the same chart. If there is a downside break below the channel support, the pair could test 1.3745 and the 100 simple moving average (red, 4-hours).

The 50% Fib retracement level of the upward move from the 1.3602 swing low to 1.3892 high is also near the 1.3745 zone. Any more downsides might start a fresh decline towards 1.3600.

On the upside, an immediate resistance is near the 1.3875 zone. The next major resistance could be 1.3900, above which GBP/USD could test 1.4000.

Looking at EUR/USD, the pair was able to clear the main 1.1800 resistance, but it is now facing resistance near the 1.1900 region.

Economic Releases

  • Euro Zone Gross Domestic Product for Q2 2021 (QoQ) - Forecast -0.6%, versus +2.0% previous.
  • Euro Zone Gross Domestic Product for Q2 2021 (YoY) - Forecast 13.6%, versus 13.6% previous.
  • German ZEW Business Economic Sentiment Index for Sep 2021 – Forecast 30, versus 40.4 previous.
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