GBP/USD Could Recover Gains Except Key Support Level is Broken

Key Take-Aways

  • GBP/USD increased and made a challenge of the 1.2000 resistance level.
  • On the 4-hours chart, a significant bullish trend line is developing with support close to 1.1740.
  • Below the $80.00 support, the price of crude oil started to decline.
  • In September 2022, retail sales in Canada could fall by 0.7%. (MoM).

Technical Analysis of GBP/USD

Above the resistance levels of 1.1650 and 1.1750, the British pound began a significant rise versus the US dollar. Even the 1.1800 barrier level was broken by GBP/USD.

The 100 simple moving average (red, 4-hours) and the 200 simple moving average were both above the 1.1700 level on the 4-hours chart (green, 4-hours).

It reached a high price of 1.2029 and just began to fall downward. Under the 1.1950 support level, it traded. The upward movement from the 1.1145 swing low to 1.2029 high was retraced at a 23.6% Fibonacci level, and this level was moved below.

The 1.1750 level serves as a temporary support. On the same chart, a significant bullish trend line is also developing, with support located close to 1.1740.

If the pair drops below this level, they may test the 100 simple moving average, which is the next significant support (red, 4-hours). Nearly 50% of the Fibonacci retracement level of the of the move to the upside from 1.1145 swing low to 1.2029 high.

The main resistance level is at 1.1500. A closure below 1.1500-level could signal the beginning of a new, severe slump. In the aforementioned scenario, the GBP/USD pair can fall near the 1.1200 support.

An immediate upward resistance is located close to the 1.1920 level. The area near 1.2000 may serve as the next significant resistance. Any further gains might pave the stage for a move in the direction of the 1.2250 resistance region.

The bears continued to be active in the oil market, and there was a sharp drop below the $80.00 support area.

Economic News To Trade Today

  • The forecast for Canadian retail sales for September 2022 (MoM) is -0.7%, down from the previous +0.7%.
  • Canadian Retail Sales excluding Autos for Sep 2022 (MoM) Forecast -0.4%, compared to +0.7% in the prior month.
Amogo Solomon is a Broker-Dealer/Market Research analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics, and Forex Broker Dealing. He specializes in Forex Dealing, markets Analysis, Currency research, forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.