(function() { var didInit = false; function initMunchkin() { if(didInit === false) { didInit = true; Munchkin.init('105-GAR-921'); } } var s = document.createElement('script'); s.type = 'text/javascript'; s.defer = true; s.src = '//munchkin.marketo.net/munchkin.js'; s.onreadystatechange = function() { if (this.readyState == 'complete' || this.readyState == 'loaded') { initMunchkin(); } }; s.onload = initMunchkin; document.getElementsByTagName('head')[0].appendChild(s); })(); (function(h,o,t,j,a,r){ h.hj=h.hj||function(){(h.hj.q=h.hj.q||[]).push(arguments)}; h._hjSettings={hjid:1422437,hjsv:6}; a=o.getElementsByTagName('head')[0]; r=o.createElement('script');r.defer=1; r.src=t+h._hjSettings.hjid+j+h._hjSettings.hjsv; a.appendChild(r); })(window,document,'https://static.hotjar.com/c/hotjar-','.js?sv=');

GBP/USD Tumbles, 1.2000 Presents Key Support

Aayush Jindal

Aayush Jindal

Key Highlights

  • GBP/USD started a fresh decline from the 1.2660 resistance zone.
  • It broke a major bullish trend line with support near 1.2470 on the 4-hours chart.
  • The UK GDP declined 0.3% in April 2022 (MoM).
  • The UK Claimant Count could change -42.5K in May 2022.

 

GBP/USD Technical Analysis

The British Pound failed to clear the 1.2660 resistance zone against the US Dollar. GBP/USD started a major decline after there was a clear move below the 1.2500 level.

Looking at the 4-hours chart, the pair declined below a major bullish trend line with support near 1.2470. It opened the doors for a move below the 1.2400 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The decline gained pace below the 76.4% Fib retracement level of the upward move from the 1.2155 swing low to 1.2666 high.

It even broke the 1.2155 low. The first key support is near the 1.2080 level. The next major support is near the 1.2035 level. It is close to the 1.236 Fib extension level of the upward move from the 1.2155 swing low to 1.2666 high.

Any more losses might send the pair towards the 1.2000 support. On the upside, an immediate resistance is near the 1.2200 level.

The next major barrier could be near the 1.2280 level. A clear move above the 1.2280 level might start a steady increase towards the 1.2400 level in the near term.

Looking at EUR/USD, the pair started a major decline below the 1.0500 level and might extend losses towards the 1.0350 level.

Economic Releases

  • UK Claimant Count Change for May 2022 – Forecast -42.5K, versus -56.9K previous.
  • UK ILO Unemployment Rate for April 2022 (3M) – Forecast 3.6%, versus 3.7% previous.
  • German Consumer Price Index for May 2022 (YoY) – Forecast +7.9%, versus +7.9% previous.
  • German Consumer Price Index for May 2022 (MoM) – Forecast +0.8%, versus +0.9% previous.
  • German ZEW Business Economic Sentiment Index for June 2022 – Forecast -27.5, versus -34.3 previous.