GBP/USD Trims Gains, Why Dips Could Be Limited
- GBP/USD corrected lower sharply from the 1.2450 resistance zone.
- A key bullish trend line is forming with support near 1.2140 on the 4-hours chart.
- EUR/USD is struggling to stay above the 1.0550 support zone.
- Gold price might attempt a fresh increase above the $1,800 resistance zone.
GBP/USD Technical Analysis
The British Pound climbed above the 1.2300 zone against the US Dollar. GBP/USD even traded close to the 1.2450 level before the bears emerged.
Looking at the 4-hours chart, the pair traded as high as 1.2446 before there was a downside correction. There was a move below the 1.2350 and 1.2320 support levels. The pair even spiked below the 1.2200 support zone and the 100 simple moving average (red, 4-hours).
On the downside, there is a decent support forming near the 1.2120 zone. There is also a key bullish trend line forming with support near 1.2140 on the same chart.
The next major support is near the 1.2080 zone, below which the pair might dive towards the 200 simple moving average (green, 4-hours). Any more losses might open the doors for a move towards the 1.1800 support zone.
On the upside, an initial resistance is near the 1.2250 level. The next major resistance may perhaps be near 1.2320. A clear move above the 1.2320 resistance might start a steady increase. In the stated case, GBP/USD may perhaps rise towards the 1.2380 level. Any more gains could lead the pair towards the 1.2240 resistance zone.
Looking at EUR/USD, the pair is showing a few bearish signs and there is now a risk of a downside break below the 1.0550 support zone.
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