Key Highlights
- GBP/USD started a major decline from well above 1.3600.
- A key bearish trend line is forming with resistance near 1.3480 on the 4-hours chart.
- EUR/USD is attempting a recovery wave above 1.1180.
- The US ISM Manufacturing Index could decline from 58.7 to 57.5 in Jan 2022.
GBP/USD Technical Analysis
The British Pound declined heavily below 1.3600 against the US Dollar. GBP/USD even traded below the 1.3550 support level to enter a bearish zone.
Looking at the 4-hours chart, the pair gained below the 1.3500 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Finally, there was a move below the 1.3400 level and a low is formed near 1.3357. It is now correcting higher and trading above 1.3400. An immediate resistance is near the 1.3480 level. The first major resistance is near the 1.3500 zone.
There is also a key bearish trend line forming with resistance near 1.3480 on the same chart. Any more gains could send the pair towards the 50% Fib retracement level of the downward move from the 1.3748 swing high to 1.3357 low.
If there is no upside break above 1.3500, the pair could start another decline. An immediate support is near the 1.3380 level. The next major support is near the 1.3365 level, below which it could test 1.3280.
Looking at EUR/USD, the pair could recover if there is a clear move above the 1.1220 resistance zone in the near term.
Economic Releases
- Germany’s Manufacturing PMI for Jan 2022 – Forecast 60.5, versus 60.5 previous.
- Euro Zone Manufacturing PMI for Jan 2022 – Forecast 59.0, versus 59.0 previous.
- UK Manufacturing PMI for Jan 2022 – Forecast 56.9, versus 56.9 previous.
- US Manufacturing PMI for Jan 2022 – Forecast 55.0, versus 54.0 previous.
- US ISM Manufacturing Index for Jan 2022 – Forecast 57.5, versus 58.7 previous.
