Key Highlights
- The British Pound declined sharply after it broke the 1.2600 support against the US Dollar.
- GBP/USD formed a couple of bearish continuation patterns on the 4-hours chart.
- There could be sharp losses if the pair fails to stay above 1.2480 or 1.2450.
- The Swiss Unemployment Rate in June 2019 (MoM) is likely to remain at 2.4%.
GBPUSD Technical Analysis
After struggling to stay above 1.2750, the British Pound started a major decline against the US Dollar. The GBP/USD pair broke a couple of important supports such as 1.2640 and 1.2600 to enter a bearish zone.
Looking at the 4-hours chart, the pair settled below the key 1.2600 support plus the 100 simple moving average (red, 4-hours). It even broke the 1.2560 support level and spiked below the last swing low near 1.2510.
During the decline, the pair formed below a couple of bearish continuation patterns on the same chart. Finally, the pair traded towards the 1.2480 level and recently corrected higher. It recovered above the 1.2510 level, but struggled to break the 1.2540 resistance.
GBP/USD failed near the 50% Fib retracement level of the downward move from the 1.2587 high to 1.2482 low. The current price action is bearish, with a declining 200 simple moving average (green, 4-hours).
Therefore, there is a risk of more losses below the 1.2480 level. The next key support is at 1.2450, below which the pair could slide towards the 1.2410 level.
Conversely, to start a decent recover, the pair must break the 1.2540 resistance. The next major resistance for the bulls could be near the 1.2580-1.2600 area.
Overall, EUR/USD and GBP/USD are currently trading with a bearish zone and they could continue to slide in the near term.
Economic Releases to Watch Today
- US JOLTS Job Openings May 2019 – Forecast 7.479M, versus 7.449M previous.
- Swiss Unemployment Rate June 2019 – Forecast 2.4%, versus previous 2.4%.
