GBP/USD Dips Profit But Has Potential for Quick Recovery

Key Take-Aways

GBP/USD underwent a significant correction lower from the 1.2450 barrier area.

On the 4-hours chart, a significant bullish trend line is developing with support close to 1.2140.

The support area of 1.0550 is proving difficult for EUR/USD to hold above.

The price of gold may try to rise again over the $1,800 barrier level.

Technical Analysis of GBP/USD 

In relation to the US Dollar, the British pound advanced past the 1.2300 level. Before the bears materialized, GBP/USD even moved very near the 1.2450 mark.

The pair reached a high of 1.2446 on the 4-hour chart before a bearish reversal. The support levels of 1.2350 and 1.2320 were breached. The pair even spiked below the 100 simple moving average and the 1.2200 support region.

A strong support is emerging on the downside close to the 1.2120 area. On the same chart, a significant bullish trend line with support close to 1.2140 is also developing.

The area around 1.2080 represents the next significant support, below which the pair may decline in direction of the 200 simple moving average. Any more losses might pave the way for a move in the direction of the 1.1800 support region.

An initial obstacle on the upward is located close to the 1.2250 level. Near 1.2320 may serve as the next significant obstacle. A definite move over the resistance at 1.2320 might signal the beginning of a continuous rise. In the aforementioned scenario, GBP/USD can increase toward the 1.2380 level. Any additional advances might push the pair closer to the 1.2240 resistance level.

 For EUR/USD, the pair is displaying a few bearish indicators, and a break below the 1.0550 support area is now possible.

Economic News To Trade Today

US Housing Starts for November 2022 (MoM): Forecast 1.415M, up from 1.425M in the previous month.

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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.