GBP/USD In Significant Downtrend Below 1.3000

Key Highlights

  • The British Pound traded to a new monthly low at 1.2865 against the US Dollar.
  • A major bearish trend line is forming with resistance near 1.2980 on the 4-hours chart of GBP/USD.
  • The US Personal Income in March 2019 (MoM) increased 0.1%, less than the 0.4% forecast.
  • The US Pending Home Sales could rise 0.5% in March 2019 (MoM).

GBPUSD Technical Analysis

Earlier this month, the British Pound traded below the key 1.3000 support against the US Dollar. The GBP/USD pair even broke the 1.2920 support and traded to a new monthly low at 1.2865.

Looking at the 4-hours chart, the pair clearly moved into a bearish zone with a close below the 1.3000 level and the 100 simple moving average (4-hours). After trading as low as 1.2865, the pair corrected above the 1.2900 and 1.2920 levels.

The pair even climbed above the 38.2% Fib retracement level of the last decline from the 1.3019 high to 1.2865 low. However, the recovery was capped by the 1.2945-1.2950 resistance zone.

Besides, it seems like the pair failed near the 50% Fib retracement level of the last decline from the 1.3019 high to 1.2865 low. To the topside, there is a strong resistance formed near the 1.2980, 1.3000 and 1.3020 levels.

There is also a major bearish trend line forming with resistance near 1.2980 on the same chart. Therefore, to start a solid recovery, GBP/USD must clear the 1.2980, 1.3000 and 1.3020 resistance levels. If not, there is a risk of additional losses below the 1.2865 swing low.

Fundamentally, the US Personal Income report for March 2019 was released by the Bureau of Economic Analysis, Department of Commerce. The market was looking for a rise of 0.4% in the Personal Income, compared with the previous month.

The actual result lower than the forecast, as the US Personal Income increased only 0.1%, less than the last 0.2%. Looking at disposable personal income (DPI), there was an increase of $0.6 billion (less than 0.1%), and personal consumption expenditures (PCE) was up $123.5 billion (0.9%).

Overall, GBP/USD is clearly facing many resistances near 1.3000 and it may continue to struggle in the near term.

Economic Releases to Watch Today

  • German CPI April 2019 (YoY) (Preliminary) – Forecast +1.6%, versus +1.3% previous.
  • German CPI April 2019 (MoM) (Preliminary) – Forecast +0.5%, versus +0.4% previous.
  • Germany’s Unemployment Change April 2019 – Forecast -6K, versus -7K previous.
  • Germany’s Unemployment Rate April 2019 – Forecast 4.9%, versus 4.9% previous.
  • Euro Zone GDP Q1 2019 (Preliminary) (QoQ) – Forecast 0.3%, versus 0.2% previous.
  • US Pending Home Sales March 2019 (MoM) – Forecast +0.5%, versus -1.0% previous.
  • Chicago Purchasing Manager’s Index April 2019 – Forecast 59.0, versus 58.7 previous.


Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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