GBP/USD Hesitates But More Gains Seem Possible

Key Highlights

• GBP/USD started a fresh increase above the 1.2350 resistance.
• A connecting bullish trend line is forming with support near 1.2340 on the 4-hours chart.
• EUR/USD extended its increase above the 1.0880 resistance.
• The US Manufacturing PMI could decline from 46.2 to 46.1 in Jan 2022 (Preliminary).

GBP/USD Technical Analysis

The British started a major increase above the 1.2200 resistance against the US Dollar. GBP/USD even broke the 1.2320 level to move into a positive zone.

Looking at the 4-hours chart, the pair settled nicely above the 1.2350 level, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

The pair even cleared the 1.2400 resistance and tested the 1.2450 zone. On the upside, an initial resistance is near the 1.2400 level. The next major resistance may perhaps be near 1.2450. A clear move above the 1.2450 resistance might start a steady increase towards the 1.2550 resistance zone.

Any more gains could open the doors for a move towards the 1.2700 level. The next key hurdle is near 1.2800, above which the pair could climb towards the 1.3000 resistance zone.

On the downside, there is a major support at 1.2320. There is also a connecting bullish trend line forming with support near 1.2340 on the same chart. The next major support is near the 1.2240 level. A downside break below the 1.2240 zone might push the pair lower.

The next major support sits near the 1.2150 level. Any more losses might open the doors for a move towards the 1.2000 support zone.

Looking at EUR/USD, the pair extended its increase, but the bears seem to be active above the 1.0900 resistance zone.

Economic Releases

• Germany’s Manufacturing PMI for Jan 2022 (Preliminary) – Forecast 47.9, versus 47.1 previous.
• Germany’s Services PMI for Jan 2022 (Preliminary) – Forecast 49.7, versus 49.2 previous.
• Euro Zone Manufacturing PMI for Jan 2022 (Preliminary) – Forecast 48.5, versus 47.8 previous.
• Euro Zone Services PMI for Jan 2022 (Preliminary) – Forecast 50.2, versus 49.8 previous.
• UK Manufacturing PMI for Jan 2022 (Preliminary) – Forecast 45.0, versus 45.3 previous.
• UK Services PMI for Jan 2022 (Preliminary) – Forecast 49.9, versus 49.9 previous.
• US Manufacturing PMI for Jan 2022 (Preliminary) – Forecast 46.1, versus 46.2 previous.
• US Services PMI for Jan 2022 (Preliminary) – Forecast 44.5, versus 44.7 previous.