Key Highlights
- The British Pound declined sharply from well above 1.3400 and broke 1.3300 against the US Dollar.
- There was a downside break below 1.3330 on the 4-hours chart of GBP/USD.
- The pair is now in a bearish zone and it could decline back towards the 1.3200 level in the near term.
- Today in the US, the Building Permits for May 2018 will be released, which is forecasted to decline by 1.4%.
GBPUSD Technical Analysis
The British Pound formed a topping pattern near 1.3440 against the US Dollar. The GBP/USD pair started a major downside move and broke the 1.3350, 1.3300 and 1.3280 support levels.
Looking at the 4-hours chart, there was a clear downside break below a contracting triangle with support at 1.3330. The pair settled below 1.3330 and the 100 (red) and 200 (green) simple moving average (4-hour).
The pair is now trading well below the 76.4% fib retracement level of the last wave from the 1.3204 low to 1.3472 high. Therefore, there are high chances of more declines back towards the last swing low of 1.3204.
Below the low, the pair could test the 1.236 Fib extension level of the last wave from the 1.3204 low to 1.3472 high. Should there be an upside correction, the pair is likely to face sellers near the 1.3280 and 1.3300 resistance levels.
However, the most important resistance for buyers is near the 1.3330 level and the 100 SMA. A close back above the mentioned resistance is needed for further gains towards the 1.3400 level in the near term.
Economic Releases to Watch Today
- US Housing Starts May 2018 (MoM) – Forecast 1.317M, versus 1.287M previous.
- US Building Permits May 2018 (MoM) – Forecast 1.350M, versus 1.352M previous.
