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GBP/USD Signaling Bearish Continuation, USD/JPY Gains

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD started a downside correction from the 1.2666 high.
  • It traded below a crucial bullish trend line with support near 1.2615 on the 4-hours chart.
  • EUR/USD is consolidating losses below the 1.0780 resistance zone.
  • USD/JPY extended increase and climbed above the 130.00 resistance.

 

GBP/USD Technical Analysis

The British struggled to clear the 1.2660 resistance zone against the US Dollar. GBP/USD formed a high near 1.2666 and started a downside correction.

Looking at the 4-hours chart, the pair traded below the 1.2640 and 1.2620 support levels. There was a move below a crucial bullish trend line with support near 1.2615.

The pair declined below the 23.6% Fib retracement level of the upward move from the 1.2155 swing low to 1.2666 high. It tested the 1.2460 support zone and the 100 simple moving average (red, 4-hours).

GBP/USD is now stuck near the 1.2500 zone and the 200 simple moving average (green, 4-hours). The next major support sits near the 1.2440 level. The main support sits near 1.2410 or the 50% Fib retracement level of the upward move from the 1.2155 swing low to 1.2666 high.

Any more losses might send the pair towards the 1.2350 support. On the upside, an immediate resistance is near the 1.2600 level.

The next major barrier could be near the 1.2660 level, above which GBP/USD could accelerate higher towards the 1.2720 resistance. Any more gains might call for a test of 1.2800.

Looking at EUR/USD, the pair must clear the 1.0780 and 1.0800 resistance levels to start a steady increase in the near term.

Economic Releases

  • German Factory Orders for April 2022 (MoM) – Forecast +0.5%, versus -4.7% previous.