GBP/USD Starts Recovery, 1.3000 Presents Key Resistance
- GBP/USD started a strong recovery wave from the 1.2677 monthly low.
- A significant resistance seems to be forming near 1.2950 and 1.3000 on the 4-hours chart.
- EUR/USD is struggling to clear the 1.1680-1.1700 resistance zone.
- The US Consumer Confidence could increase from 84.8 to 89.2 in Sep 2020.
GBP/USD Technical Analysis
This past week, the British Pound extended its decline below the 1.2800 support against the US Dollar. GBP/USD traded as low as 1.2677 and recently started a strong increase.
Looking at the 4-hours chart, the pair recovered sharply above the 1.2750 and 1.2800 resistance levels. There was a break above the 50% Fib retracement level of the downward move from the 1.3007 high to 1.2677 low.
However, the pair is facing many hurdles, starting with the 100 simple moving average (red, 4-hours) at 1.2920. There is also a key bearish trend line forming with resistance near 1.2950 on the same chart.
The main resistance is near the 1.3000 zone and the 200 simple moving average (green, 4-hours). A successful close above the 1.2950 and 1.3000 resistance levels could start a sustained upward move in the near term. The next major resistance could be 1.3200.
Conversely, the pair may perhaps fail to surpass the 1.3000 resistance zone. As a result, there could be a fresh decline below the 1.2800 and 1.2780 levels. The first major support is near 1.2750, below which GBP/USD might revisit the 1.2677 low.
Looking at EUR/USD, the pair remained stable above 1.1600, but it is struggling to climb above 1.1680 and 1.1700. Overall, the US Dollar is correcting gains, but it is approaching important supports against the Euro and the British Pound.
Upcoming Economic Releases
- German Consumer Price Index for Sep 2020 (YoY) – Forecast -0.1%, versus 0% previous.
- German Consumer Price Index for Sep 2020 (MoM) – Forecast -0.1%, versus -0.1% previous.
- US Consumer Confidence for Sep 2020 - Forecast 89.2, versus 84.8 previous.
- BoE's Governor Bailey speech.