Key Take-Aways
- GBP/USD began to correct upward above 1.1940.
- On the 4-hours chart, it broke through a significant negative trend line that had resistance near 1.1895.
- If there is a definite move above 1.0280, the EUR/USD may also increase.
- The $1,740 zone represents an obstacle for the gold price.
Technical Analysis of GBP/USD
From the area of 1.1900 to 1.2000 versus the US Dollar, the British pound began an upward correction. Although the GBP/USD exchange rate is back over 1.1900, it still has a lot of significant obstacles to overcome.
On the 4-hours chart, the pair was able to overcome the resistance levels of 1.1920 and 1.1940. A significant negative trend line with resistance near 1.1895 was broken above. The path was now clear for a move to the 50% Fibonacci retracement level of the decline from the 1.2333 swing high to 1.1759 low.
The pair is trading above both the 100 simple moving average and the 1.2000 mark (red, 4-hours). The 200 simple moving average and the 1.2100 level, however, are providing resistance (green, 4-hours).
Resistance is also present around the 61.8 percent Fib retracement level of the decline from the 1.2333 swing high to the 1.1759 low. A closing above the level of 1.2100 might pave the way for a gradual rise.
Near the 1.2150 mark, which would be the next significant barrier, the pair might advance to 1.2250. The pair could correct lower and dip below 1.2000 if there is no upside break.
The next significant support level is 1.1950, below which the pair may start to fall again. In the aforementioned scenario, the pair may fall near the level of 1.1850.
With regard to EUR/USD, the pair is also attempting a recovery wave; if a move is made above the 1.0280 level, the wave may pick up speed.
Economic News to Trade Today
- US New Home Sales for June 2022 (MoM): Forecast 5.5 percent vs. 10.7 percent in Previous
- Forecast Richmond Fed Manufacturing Index for July 2022: Forecast -14, up from previous value of -11.
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