Key Highlights
- The British Pound failed to move above the 1.4065 resistance and declined versus the US Dollar.
- There is a significant bearish trend line forming with resistance at 1.4030 on the 4-hours chart of GBP/USD.
- The US Durable Goods Orders in Jan 2018 declined 3.7%, more than the -2.0% forecast.
- Today, the US Gross Domestic Product Q4 2017 (Preliminary) will be released (Forecast 2.5% versus previous 2.6%).
GBPUSD Technical Analysis
The British Pound failed to move above a breakout resistance level near 1.4060-70 against the US Dollar. The GBP/USD pair is currently under pressure and it could trade further lower.
On the upside, there is a major resistance forming near 1.4030, and on the downside, there is a key support at 1.3900. A break on the either side could trigger the next move in GBP/USD.
Looking at the 4-hours chart, the pair was recently rejected from a significant bearish trend line with current resistance at 1.4030. The pair traded lower and broke the 50% Fib retracement level of the last wave from the 1.3856 low to 1.4069 high.
It is a negative sign and it seems like the pair may continue to decline towards the 1.3900 support. Should there be a break below the 1.3900 support, the pair may retest the last low of 1.3856. Any further declines could increase bearish pressures for a move towards 1.3750.
On the upside, the pair must break the trend line resistance near 1.4030 to recover. Above 1.4030, the pair may rise towards the 1.4100 level.
Recently in the US, the Durable Goods Orders figure for Jan 2018 was released by the US Census Bureau. The market was looking for a decline of 2% in orders.
The actual result was disappointing as there was a decline of 3.7% in orders in Jan 2018. Moreover, the Durable Goods Orders ex transportation posted a decline of 0.3%, whereas the market forecast was +0.4%.
The market sentiment still favored the US Dollar, and pairs such as EUR/USD and AUD/USD were under pressure. More importantly, the USD/JPY pair was seen trading higher with a positive tone.
Economic Releases to Watch Today
- Germany’s Unemployment Change for Feb 2018 – Forecast -15K, versus -25K previous.
- Germany’s Unemployment Rate for Feb 2018 – Forecast 5.4%, versus 5.4% previous.
- Euro Zone CPI for Feb 2018 (YoY) – Forecast +1.2%, versus +1.3% previous.
- US Gross Domestic Product Q4 2017 (Preliminary) – Forecast 2.5% versus previous 2.6%.
