GBP/USD Will Likely Reverse Higher In Gains, Price of Oil Dips

Key Take-Aways

Near the 1.2450 area, GBP/USD is seeing significant resistance.

On the 4-hours chart, a significant bullish trend line is developing with support close to 1.2350.

If EUR/USD continues below 1.0920 for an extended period of time, it may correct lower.

The $82.40 resistance area saw a correction downward in the price of crude oil.

Technical Analysis of GBP/USD

1.2450 seems to be a significant area of resistance for the British pound when compared to the US dollar. Before entering a stabilization phase, the GBP/USD exchange rate reached a high of 1.2447.

On the 4-hour chart, the pair gradually dropped from its 1.2447 peak. The 100 simple moving average (red, 4-hours) and the 200 simple moving average are both far above where the pair is currently trading.

Dropping below the 38.2% Fib retracement level of the upward movement from the 1.2087 swing low to 1.2447 high, there was a downward movement. The pair challenged support at 1.2270 and held it decently.

Bulls safeguarded the upward movement from the 1.2087 swing low to 1.2447 high at the 50% Fib retracement level. On the same chart, a significant bullish trend line with support close to 1.2350 is also developing.

The pair may target the 1.2270 support level and the 100 simple moving average if there is a negative break. Near the 1.2200 level and the 200 simple moving average, there is the next significant support. Any more losses might pave the way for a move in the direction of the 1.2080 support region.

The pair is up against resistance near 1.2420. Near the 1.2450 level comes the first significant obstacle. A definite rise above the 1.2450 resistance might signal the beginning of a steady ascent toward the 1.2550 barrier region.

Any further gains might pave the way for a move in the direction of the 1.2680 level. The next significant obstacle is close to 1.2720; if it is cleared, the pair may rise toward the 1.2850 resistance region.

for EUR/USD, there is a chance of a short-term negative correction as the pair is consolidating above the 1.0850 region.

Economic News To Trade Today

  • Euro Zone GDP Q4 2022 (Preliminary) (YoY) – Forecast 1.8%, down from 2.3% in the previous quarter.
  • Euro Zone GDP Q4 2022 (Preliminary) (QoQ) – Forecast 0%, down from 0.3% in the previous quarter.
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.