Key Highlights
- The British Pound found support near 1.2720 and recovered against the US Dollar.
- There is a crucial bearish trend line formed with resistance at 1.2900 on the 4-hours chart of GBP/USD.
- The German business sentiment index in Nov 2018 declined from the last revised reading of 102.9 to 102.0.
- Today, the US House Price Index for Sep 2018 will be released, which is forecasted to increase 0.4% (MoM).
GBPUSD Technical Analysis
The British Pound formed a decent base near the 1.2730 level and started an upside correction against the US Dollar. The GBP/USD pair recovered above 1.2820 and it is now facing a solid resistance near 1.2900.
Looking at the 4-hours chart, the pair started a decent recovery from the 1.2720 swing low. It traded above the 1.2800 resistance and the 23.6% Fib retracement level of the last decline from the 1.3071 high to 1.2722 low.
However, the price struggled to break the 1.2900-1.2915 resistance area plus the 100 simple moving average (red, 4-hours). Besides, there was no close above the 50% Fib retracement level of the last decline from the 1.3071 high to 1.2722 low.
Moreover, there is a crucial bearish trend line formed with resistance at 1.2900. Therefore, the pair must break the 1.2900 and 1.12915 resistance levels to move into a positive zone.
On the downside, an immediate support awaits at 1.2800, below which the pair may perhaps drop back towards the 1.2720 swing low in the near term. Overall, it seems like GBP/USD is preparing for the next break either above 1.2900 or below 1.2800.
Fundamentally, the German IFO business sentiment index for Nov 2018 was released by the CESifo Group. The market was looking for a decline from the last reading of 102.8 to 102.3.
However, the result was negative as there was a decline in the index to 102.0. On the positive side, the last reading was revised up from 102.8 to 102.9.
The EUR/USD pair stayed above the 1.1320 support, but it is facing many resistances near the 1.1400, 1.1420 and 1.1440 levels.
Economic Releases to Watch Today
- UK’s CBI Industrial Trends Survey Realized Nov 2018 (MoM) – Forecast 10%, versus 5% previous.
- US House Price Index for Sep 2018 (MoM) – Forecast +0.4%, versus +0.3% previous.
- S&P/Case-Shiller Home Price Indices for Sep 2018 (YoY) – Forecast +5.3%, versus +5.5% previous.
