Key Highlights
- GBP/USD is holding the 1.2620 and 1.2600 support levels.
- A key declining channel is forming with resistance near 1.2700 on the 4-hour chart.
- EUR/USD extended losses toward 1.0800 and remains at risk of more downsides.
- The Fed interest rate decision is scheduled today (forecast 5.5%, versus 5.5% previous).
GBP/USD Technical Analysis
The British Pound started a fresh decline after it faced sellers near 1.2775 against the US Dollar. GBP/USD is now holding the 1.2600 support and might start a fresh increase.
Looking at the 4-hour chart, the pair is showing a few positive signs from the 1.2640 support. The bulls are now attempting a fresh increase above the 1.2665 level. On the upside, the bulls are facing hurdles near the 1.2700 level.
There is also a key declining channel forming with resistance near 1.2700 on the same chart. It is close to the 100 simple moving average (red, 4 hours) and the 200 simple moving average (green, 4 hours).
The next key resistance is near the 1.2740 level. A close above the 1.2740 zone could open the doors for more upsides. The next stop for the bulls might be 1.2780. Any more gains might send EUR/USD toward the 1.2850 level.
If there is another decline, the pair might find bids near the 1.2640 level. The main support sits near the 1.2600 level. If there is a downside break below the 1.2600 level, the pair could even dive below 1.2565. The next major support is 1.2520. Any more losses might call for a drop toward the 1.2440 support.
Looking at EUR/USD, the pair is showing bearish and there is still a risk of more downsides below the 1.0800 support zone.
Economic Releases
- US ADP Employment Change for Jan 2023 – Forecast 145K, versus 164K previous.
- Fed Interest Rate Decision – Forecast 5.5%, versus 5.5% previous.
