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GBP/USD Weakens – Is The Pair Entering A New Downtrend Phase?

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Aayush Jindal

Key Highlights

  • GBP/USD is struggling to recover above 1.3500.
  • A major bearish trend line is forming with resistance near 1.3470 on the 4-hour chart.
  • EUR/USD is moving lower and might drop below 1.1620.
  • Gold extended gains and rallied to a new record high above $3,980.

GBP/USD Technical Analysis

The British Pound attempted a recovery wave above 1.3450 against the US Dollar. GBP/USD seems to be struggling to settle above 1.3500 and 1.3525.

Looking at the 4-hour chart, the pair traded as high as 1.3527 and recently corrected gains. There was a move below the 1.3480 support. The pair dipped below the 50% Fib retracement level of the upward move from the 1.3323 swing low to the 1.3527 high.

The pair is now trading well below 1.3500, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). Besides, there is a major bearish trend line forming with resistance near 1.3470.

To start a decent increase, GBP/USD must settle above the trend line and 1.3500. The main hurdle could be near 1.3525. A close above 1.3525 could open the doors for a fresh increase. If not, the pair could decline again.

On the downside, there is key support at 1.3370 and the 76.4% Fib retracement level of the upward move from the 1.3323 swing low to the 1.3527 high. The next area of interest might be 1.3350. The main support could be 1.3320. Any more losses might increase selling pressure and send the pair toward 1.3200.

Looking at EUR/USD, the pair attempted to recover, but the bears are still active below the 1.1750 resistance level.

Upcoming Key Economic Events:

  • FPC Meeting Minutes.
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