GBP/USD Gain Could Encounter Resistance, US Dollar Holds Strong
- Prior to making a higher correction, GBP/USD fell to a new low of 1.0340.
- On the 4-hours chart, a significant negative trend line is developing with resistance close to 1.1050.
- Although the EUR/USD reversed upward, it is still struggling.
- Risk of more declines for AUD/USD and NZD/USD.
Technical Analysis of GBP/USD
The British pound began a significant drop versus the US dollar from well above 1.1000. GBP/USD fell by more than 500 pip to a new low.
The pair dropped below the 1.0650 support level on the 4-hours chart, further advancing into a bearish territory. The price of the pair fell well below 1.1000, the red 4-hour 100 simple moving average, and the 200 simple moving average.
Before the pair began an upward correction, a new low was established near 1.0340. Above 1.0650, there was a slight uptick.
The price of the pair increased over the 23.6% Fibonacci retracement level of the decline from the swing high of 1.1738 to the low of 1.0340. An initial resistance on the upward is located close to the 1.0950 region.
Near the 1.1000 mark is the first significant resistance. On the same chart, a significant bearish trend line is also developing, with resistance located close to 1.1050. The trend line is close to the 50% Fib retracement level of the decline from the swing high of 1.1738 to the low of 1.0340.
A clear move above the resistance of the trend line could pave the way for another rise to 1.1200. Gains might push the pair closer to the 1.1400 barrier level.
An initial support for the downside is located close to the 1.0650 level. The 1.0550 level serves as the main support. The pair may move in the direction of the 1.0500 level if the downside breaks below the 1.0550 region. Near the 1.0340 level is the next significant support, below which the pair could attempt 1.0200 price level.
Economic News To Trade Today
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Author: Amogo Solomon
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