- GBP/USD gained bullish momentum after it recovered above 1.2000.
- A key bullish trend line is forming with support near 1.2390 on the 4-hours chart.
- Major hurdles on the upside are near 1.2620 and 1.2750.
- The US Import Price Index is likely to decline 1.7% in March 2020 (MoM).
GBP/USD Technical Analysis
After trading as low as 1.1415 in March 2020, the British Pound started a strong recovery against the US Dollar. GBP/USD broke the key 1.2000 resistance area to move back into a positive zone.
Looking at the 4-hours chart, the pair gained bullish momentum above 1.2000 and 1.2200. Besides, there was a close above the 1.2250 level and the 100 simple moving average (red, 4-hours).
The bulls were able to push GBP/USD above the 50% Fib retracement level of the main decline from the 1.3200 high to 1.1415 low. The pair is now trading nicely above the 1.2450 level and a key bullish trend line with support near 1.2390 on the same chart.
On the upside, an initial resistance is near the 1.2650 level. The next key resistance is near the 1.2750 level or the76.4% Fib retracement level of the main decline from the 1.3200 high to 1.1415 low.
If GBP/USD remains stable above the bullish trend line, it could continue to rise towards 1.2650 or 1.2750. If not, there is a risk of a downside correction below 1.2350.
The main support is near the 1.2200 level and the 100 SMA, below which the bears are likely to aim a test of the 1.2000 support area.
Overall, GBP/USD might rise further as long as it is above 1.2400. Looking at EUR/USD, the pair is facing a couple of key hurdles near 1.0950 and 1.1000.
Upcoming Economic Releases
- US Import Price Index March 2020 (MoM) – Forecast -1.7%, versus -0.5% previous.
- US Export Price Index March 2020 (MoM) – Forecast -1.9%, versus -1.1% previous.