Key Take-Aways
- GBP/USD struggled and corrected lower towards 1.2290.
- On the 4-hours chart, it broke through a crucial bullish trend line with support close to 1.2160.
- The price of gold is trending upward and is expected to rise further.
- The EUR/USD currency pair is settling close to 1.0200.
Technical Analysis of GBP/USD
Against the US Dollar, the British Pound attempted an upward break over the 1.2300 resistance. GBP/USD produced a short-term peak near 1.2293 after failing to move higher.
The pair began a downside retreat below the 1.2250 support level, according to the 4-hours chart. A crucial bullish trend line with support near 1.2160 was breached. The price of the pair fell under the 23.6 percent Fib retracement level of the bullish movement from the swing low of 1.1759 to the high of 1.2293.
Furthermore, it dropped lower to test the 1.2000 threshold. It is currently consolidating at the 200 simple moving average and the 100 simple moving average (red, 4-hours) (green, 4-hours).
Near 1.2025 is where the first significant support is located. It is close to where the upward movement from the 1.1759 swing low to 1.2293 high is retracing by 50% on the Fibonacci scale. Losses can increase if the 1.2000 support area is breached on the downside.
Near 1.1920 is the next significant support. Any more losses might push the pair toward the area of 1.1850. The pair is encountering resistance near the 1.2100 level on the upswing.
The pair could move higher if it can clear the next significant resistance, which is close to the 1.2160 level. In the aforementioned scenario, the pair may increase in the near term toward the 1.2300 resistance region.
The price of gold has been rising steadily above $1,780, and it appears that the bulls are targeting further gains above the $1,800 resistance.
Economic News to Trade Today The IBD/TIPP Economic Optimism Index for July 2022 is expected to be 36.55, down from the previous reading.
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