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GBP/USD Starts Recovery, Key Hurdles Nearby

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Aayush Jindal

Key Highlights

  • GBP/USD started an upside correction above 1.1950.
  • It broke a major bearish trend line with resistance near 1.1880 on the 4-hours chart.
  • EUR/USD could gain pace if it clears the 1.0240 resistance.
  • Gold price is struggling to recover above the $1,740 level.

GBP/USD Technical Analysis

The British started a major decline from well above the 1.2200 zone against the US Dollar. GBP/USD even broke the 1.2000 support and tested the 1.1760 zone.

Looking at the 4-hours chart, the pair traded as low as 1.1759. It settled well below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

Recently, there was an upside correction above the 1.1850 resistance level. There was a clear move above a major bearish trend line with resistance near 1.1880 on the same chart. Besides, the pair climbed above the 38.2% Fib retracement level of the downward move from the 1.2332 swing high to 1.1759 low.

It is now facing resistance near the 1.2040 level or the 100 simple moving average (red, 4-hours). It is close to the 50% Fib retracement level of the downward move from the 1.2332 swing high to 1.1759 low.

If there is an upside break, the pair could rise towards 1.2200. The next major resistance could be near the 1.2250 level, above which the pair could rise to 1.2400.

If there is no upside break, the pair could correct lower and dip below 1.1950. The next major support is 1.1850, below which the pair could resume its downtrend.

Looking at EUR/USD, the pair also started an upside correction above the parity level but might face hurdles near the 1.0240 zone.

Economic Releases

  • UK Claimant Count Change for June 2022 – Forecast -5.0K, versus -19.7K previous.
  • UK ILO Unemployment Rate for May 2022 (3M) – Forecast 3.8%, versus 3.8% previous.
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