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GBP/USD Resumes Decline, Dollar Gains Strength

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Aayush Jindal

Key Highlights

  • GBP/USD extended its decline below the 1.3750 support zone.
  • A major bearish trend line is forming with resistance near 1.3850 on the 4-hours chart.
  • EUR/USD is also following a bearish path below 1.1850.
  • AUD/USD and NZD/USD are slowly moving lower below 0.7400 and 0.7000 respectively.

GBP/USD Technical Analysis

The British Pound struggled to recover above the key 1.3900 resistance zone against the US Dollar. As a result, GBP/USD started a fresh decline and it even settled below 1.3800.

Looking at the 4-hours chart, the pair broke the 1.3750 support level. There was also a close below 1.3800, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair traded below the last swing low and broke the 1.3720 support. It broke the 1.236 Fib extension level of the last key upward move from the 1.3741 swing low to 1.3909 high.

If the pair continues to move down, the pair could even trade below 1.3650. The next key support is near the 1.3620 level. On the upside, the bears are likely to remain active near 1.3820 and 1.3850.

There is also a major bearish trend line forming with resistance near 1.3850 on the same chart. A close above 1.3850 is needed to initiate a decent recovery.

Looking at EUR/USD, the pair is struggling below 1.1850 and it seems like the pair could even test the 1.1720 support zone in the near term.

Economic Releases

  • US Housing Starts for June 2021 (MoM) – Forecast 1.597M, versus 1.572M previous.
  • US Building Permits for June 2021 (MoM) – Forecast 1.70M, versus 1.683M previous.
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