GBP/USD: Upsides Could Be Limited Above 1.2150

Key Highlights

• GBP/USD started an upside correction from the 1.1915 zone.
• It is facing resistance near 1.2100 and 1.2150 on the 4-hours chart.
• EUR/USD is also struggling to recover above the 1.0750 resistance zone.
• The US Manufacturing PMI could rise to 47.3 from 46.9 in Feb 2023 (Preliminary).

GBP/USD Technical Analysis

The British Pound extended its decline below the 1.2200 support against the US Dollar. GBP/USD declined below the 1.2100 support zone to enter a bearish zone.

Looking at the 4-hours chart, the pair settled below the 1.2100 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

There was a clear move below the 1.2000 support zone. The pair traded as low as 1.1914 and is currently correcting losses. There was a minor increase above the 1.1950 and 1.2000 resistance levels.

However, the pair is now facing resistance near the 1.2100 level. It is close to the 50% Fib retracement level of the downward move from the 1.2270 swing high to 1.1914 low. The next major resistance is near the 1.2150 level and the 100 simple moving average (red, 4-hours).

A clear move above the 1.2150 resistance might start a steady increase towards the 1.2270 resistance zone. Any more gains could open the doors for a move towards the 1.2400 level.

On the downside, an immediate support is near the 1.1980 level. The next major support is near the 1.1920 level, below which there is a risk of a move towards the 1.1850.

Looking at EUR/USD, the pair is attempting a recovery wave, but it is likely to face resistance near 1.0750 and 1.0800.

Economic Releases

• Germany’s Manufacturing PMI for Feb 2023 (Preliminary) – Forecast 47.8, versus 47.3 previous.
• Germany’s Services PMI for Feb 2023 (Preliminary) – Forecast 51.0, versus 50.7 previous.
• Euro Zone Manufacturing PMI for Feb 2023 (Preliminary) – Forecast 49.3, versus 48.8 previous.
• Euro Zone Services PMI for Feb 2023 (Preliminary) – Forecast 51.0, versus 50.8 previous.
• US Manufacturing PMI for Feb 2023 (Preliminary) – Forecast 47.3, versus 46.9 previous.
• US Services PMI for Feb 2023 (Preliminary) – Forecast 47.2, versus 46.8 previous.
• Canadian Consumer Price Index for Jan 2023 (MoM) – Forecast +0.7%, versus -0.6% previous.
• Canadian Consumer Price Index for Jan 2023 (YoY) – Forecast +6.1%, versus +6.3% previous.