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Aayush Jindal

Key Highlights

  • GBP/USD failed to correct higher and declined below 1.1950.
  • A crucial bearish trend line is forming with resistance near 1.2050 on the 4-hours chart.
  • EUR/USD extended losses and traded below the 1.0110 support.
  • USD/JPY rallied to a new multi-year high above 137.50.

GBP/USD Technical Analysis

The British Pound failed to correct higher above the 1.2050 level against the US Dollar. GBP/USD started a fresh decline and moved into a bearish zone below 1.2000.

Looking at the 4-hours chart, the pair gained pace below the 1.1980 level, the 100 simple moving average (red, 4-hours). It is also well above the 200 simple moving average (green, 4-hours).

The pair even spiked below the last swing low of 1.1875. If the bears remain in action, the pair could slide towards the 1.1820 level. The next major support sits near the 1.1750 level. A downside break below the 1.1750 support could send the pair further lower.

On the upside, the pair is facing resistance near the 1.2000 zone. There is also a crucial bearish trend line forming with resistance near 1.2050 on the same chart.

A clear move above the trend line might call for a test of the 1.2050 resistance. Any more gains may perhaps open the doors for a move towards the 1.2180 resistance.

Looking at EUR/USD, the pair failed to recover above the 1.0120 level and started another decline. It seems like the bears could aim a move below 1.0000.

Economic Releases

  • German ZEW Business Economic Sentiment Index for July 2022 – Forecast -38, versus -28 previous.
  • Eurozone ZEW Business Economic Sentiment Index for July 2022 – Forecast -32.8, versus -27.6 previous.