Key Highlights
- GBP/USD started a downside correction from the 1.2600 zone.
- It traded below a key bullish trend line with support near 1.2550 on the 4-hour chart.
- EUR/USD is still holding the 1.0710 support zone.
- The US Consumer Price Index could decline from 4.9% to 4.1% in May 2023 (YoY).
GBP/USD Technical Analysis
The British Pound gained pace for a move above 1.2500 against the US Dollar. GBP/USD even broke the 1.2550 resistance before the bears appeared.
Looking at the 4-hour chart, the pair tested the 1.2600 zone. It recently started a downside correction below the 1.2550 level. The pair traded below a key bullish trend line with support near 1.2550.
It even traded below the 38.2% Fib retracement level of the upward move from the 1.2427 swing low to the 1.2599 high. Immediate support is near the 1.2500 level and the 100 simple moving average (red, 4 hours).
The 61.8% Fib retracement level of the upward move from the 1.2427 swing low to the 1.2599 high is also near 1.2500. The next major support is near the 1.2460 level and the 200 simple moving average (green, 4 hours).
If there is a downside break below the 1.2460 support, the pair could decline toward the 1.2400 support. Any more losses might send EUR/USD toward 1.2320.
If there is a fresh increase, the pair could face resistance near 1.2550. The first major resistance is near the 1.2600 level. If there is a move above the 1.2600 resistance, the pair could drift toward 1.2740.
Looking at EUR/USD, the pair is attempting a recovery wave but the pair could face resistance near the 1.0850 zone.
Economic Releases
- UK Claimant Count Change for May 2023 – Forecast -9.6K, versus 46.7K previous.
- UK ILO Unemployment Rate for April 2023 (3M) – Forecast 4.0%, versus 3.9% previous.
- US Consumer Price Index for May 2023 (MoM) – Forecast +0.2%, versus +0.4% previous.
- US Consumer Price Index for May 2023 (YoY) – Forecast +4.1%, versus +4.9% previous.
- US Consumer Price Index Ex Food & Energy for May 2023 (YoY) – Forecast +5.3%, versus +5.5% previous.
