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GBP/USD Takes Off After Fed Move—Is More Dollar Weakness Ahead?

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Aayush Jindal

Key Highlights

  • GBP/USD gained pace for a move above the 1.3350 resistance.
  • A key bullish trend line is forming with support at 1.3325 on the 4-hour chart.
  • EUR/USD rallied above 1.1650 and 1.1680.
  • USD/JPY saw a bearish reaction after the Fed rate cut of 0.25%.

GBP/USD Technical Analysis

The British Pound started a strong increase above 1.3320 against the US Dollar. GBP/USD even cleared the 1.3350 barrier to enter a positive zone.

Looking at the 4-hour chart, the pair settled above the 1.3350 level, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). A high was formed at 1.3392, and the pair is now consolidating gains.

There is also a key bullish trend line forming with support at 1.3325. Immediate resistance sits near 1.3390. The first key hurdle is seen near 1.3400.

A close above 1.3400 could open the doors for a move toward 1.3450. Any more gains could set the pace for a steady increase toward 1.3500. On the downside, there is key support at 1.3340 and the 50% Fib retracement level of the upward move from the 1.3287 swing low to the 1.3392 high.

The next support is 1.3325 and the trend line. A close below 1.3325 could open the doors for a test of 1.3280. The main support sits near the confluence zone at 1.3220, and the 100 simple moving average (red, 4-hour).

Looking at EUR/USD, the pair gained pace for a strong increase and was able to clear the 1.1680 resistance zone.

Upcoming Key Economic Events:

  • US Initial Jobless Claims - Forecast 220K, versus 191K previous.
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