Key Take-Aways
- From the 1.2000 support, GBP/USD is attempting a comeback wave.
- On the 4-hour chart, it is up against resistance at 1.2180 and 1.2220.
- The EUR/USD fell to 1.0655 and is still at risk of further losses.
- In January 2023, the US Consumer Price Index could drop from 6.5% to 6.2%.
Technical Analysis of GBP/USD
The British pound began a significant drop against the US Dollar from much above the 1.2350 mark. GBP/USD fell below the 1.2200 level of support, entering a negative area.
The pair fell below the 1.2160 support level, the 100 simple moving average (4-hour red), and the 200 simple moving average, as seen on the 4-hour chart.
Additionally, the price closed below the 1.2150 support region. It tested the 1.1960 support zone before stopping. The pair just began an upward correction and traded over 1.2120. It passed through the major decline’s 38.2% Fib retracement mark from the 1.2401 swing high to 1.1961 low.
The pair, however, was unable to surpass 1.2170 and the 200 simple moving average. It is close to where the important slide from the 1.2401 swing high to 1.1961 low is 50% Fib retraced.
Near the 1.2220 level comes the next significant obstacle. A definite move above the 1.2220 barrier might signal the beginning of a persistent rise toward the 1.2300 resistance area.
Any additional gains would pave the way for a move in the direction of the 1.2400 mark, above which the bulls might seek for a retest of the 1.2440 resistance.
When examining EUR/USD, the pair fell to a new monthly low close to 1.0655, and further losses are still possible in the near future.
Economic News To Trade Today
- UK Claimant Count Change for January 2023 is predicted to be 3.0K, down from 19.7K in the past.
- Forecast for the US Consumer Price Index for January 2023 (MoM) is +0.5%, up from the previous +0.1%.
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