Key Highlights
- The British Pound declined recently below the 1.3000 and 1.2940 supports against the US Dollar.
- There is a crucial bearish trend line in place with resistance at 1.3160 on the 4-hours chart of GBP/USD.
- The Italian Industrial Output in Sep 2018 declined 0.2%, less than the -0.7% forecast.
- Today, the UK Claimant Count figure for Oct 2018 will be released, which is forecasted to change by 4.3K.
GBPUSD Technical Analysis
This past week, the British Pound corrected higher sharply above 1.2900 against the US Dollar. However, the GBP/USD pair failed to break the 1.3170 and 1.3180 resistances, resulting in a fresh decline.
Looking at the 4-hours chart, the pair traded as high as 1.3174 and later started a sharp decline. The pair traded below the 1.3000 support area and the 100 simple moving average (red, 4-hours).
More importantly, there was a break below the 61.8% Fib retracement level of the last major upward move from the 1.2692 low to 1.3174 high. It seems like buyers lost control below 1.3000, which could result in more losses in the near term.
If there is a break below the 1.2800 support and the 76.4% Fib retracement level of the last major upward move from the 1.2692 low to 1.3174 high, the pair could slide towards the 1.2700 support.
On the other hand, if there is an upside correction, the pair may perhaps face sellers near the 1.2940 level and the 100 simple moving average (red, 4-hours). Besides, there is a crucial bearish trend line in place with resistance at 1.3160 on the same chart.
Overall, GBP/USD is currently trading in a bearish zone below 1.3000 and any major upward move is likely to face a lot of selling interest.
However, the UK Claimant Count figure for Oct 2018 and the ILO Unemployment Rate will be released today. If the outcome is positive, there are chances of a decent recovery above 1.2940 and 1.3000. If not, the pair could slide further below 1.2800 in the near term.
Economic Releases to Watch Today
- German Consumer Price Index for Oct 2018 (YoY) – Forecast +2.5%, versus +2.5% previous.
- German Consumer Price Index for Oct 2018 (MoM) – Forecast +0.2%, versus +0.2% previous.
- German ZEW Business Economic Sentiment Index for Nov 2018 – Forecast -25.0, versus -24.7 previous.
- UK Claimant Count Change Oct 2018 – Forecast 4.3K, versus 18.5K previous.
- UK ILO Unemployment Rate Sep 2018 (3M) – Forecast 3.0%, versus 2.7% previous.
