Key Highlights
- The British Pound is holding the 1.3350 support area nicely against the US Dollar.
- A major contracting triangle is forming with support at 1.3340 and resistance at 1.3460 on the 4-hours chart of GBP/USD.
- A successful break above 1.3460 will most likely lift the market sentiment in favor of more gains.
- The UK’s GfK Group Consumer Confidence in Dec 2017 came in at -13, down from the last -12.
GBPUSD Technical Analysis
During the past few days, the British Pound was seen trading in a range above the 1.3300 level against the US Dollar. However, the GBP/USD pair is slowly approaching a major break either above 1.3460 or below 1.3340.
Looking at the 4-hour chart, the pair found support recently at 1.3304 and started an upside move. It broke the 50% Fib retracement level of the last decline from the 1.3465 high to 1.3304 low. However, the pair is facing major hurdles on the upside near 1.3440-50.
The current price action is positive above the 1.3300 handle and the 200 simple moving average (green, 4-hour). It seems like there is a major contracting triangle is forming with support at 1.3340 and resistance at 1.3460.
The pair might continue to consolidate in a range of 1.3340-1.3460 before making the next move. Should there be a 4-hour close above 1.3460, the pair could test the 1.618 Fib extension of the last decline from the 1.3465 high to 1.3304 low.
On the other hand, if GBP/USD buyers fail to take the pair higher, there are chances of a downside reaction toward 1.3350. Further below 1.3340, the pair may move into the bearish zone.
Today, the US Gross Domestic Product figures for Q3 2017 will be released by the US Bureau of Economic Analysis. The forecast is aligned for a 3.3% rise (annualized). If the actual is below the estimate, GBP/USD might move above 1.3460. On the flip side, if the US GDP registers a growth of 3.3% or more, then GBP/USD will most likely come under bearish pressure.
Key supports to watch are 1.3340 and 1.3300, and resistances on the upside are at 1.3460 and 1.3500.
