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GBP/USD Starts Recovery, 1.2650 Is The Key

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD started an upside correction above 1.2500.
  • It broke a major bearish trend line with resistance near 1.2460 on the 4-hours chart.
  • EUR/USD broke the key 1.0650 resistance zone.
  • Crude oil price is consolidating above the $110 pivot level.

 

GBP/USD Technical Analysis

The British Pound started a decent recovery wave above the 1.2400 level against the US Dollar. GBP/USD even cleared the 1.2500 level to move into a short-term positive zone.

Looking at the 4-hours chart, the pair remained well bid above the 1.2200 before there was a recovery wave. There was a clear move above the 1.2500 resistance zone and the 100 simple moving average (red, 4-hours).

Besides, there was a break above a major bearish trend line with resistance near 1.2460 on the same chart. The pair climbed above the 50% Fib retracement level of the key decline from the 1.2638 swing high to 1.2155 low.

It is now trading above the 76.4% Fib retracement level of the key decline from the 1.2638 swing high to 1.2155 low. On the upside, the pair is facing resistance near the 1.2650 level and the 200 simple moving average (green, 4-hours).

The next major resistance is near the 1.2765. A clear move above the 1.2765 level might push the pair towards the key 1.2880 resistance zone.

If not, there is a risk of another decline below the 1.2500 level. The next key support is near 1.2450. A clear move below the 1.2450 level may perhaps send the pair to 1.2320.

Looking at EUR/USD, the pair was able to clear the key 1.0600 and 1.0650 resistance levels to move further into a positive zone.

Economic Releases

  • US New Home Sales for April 2022 (MoM) – Forecast -3.4% versus -8.6% previous.