Key Highlights
- The British Pound recovered from a new 2-year low at 1.2014 against the US Dollar.
- GBP/USD is likely to face a strong selling interest near 1.2150 or 1.2200.
- The UK Claimant count could change 22.8K in July 2019, less than the last 38.0K.
- EUR/USD remained well bid and supported above the 1.1150 area.
GBP/USD Technical Analysis
In the past few days, the British Pound declined heavily below 1.2250 and 1.2150 supports against the US Dollar. The GBP/USD pair even traded to a new 2-year low at 1.2014 and recently started an upside correction.
Looking at the 4-hours chart, the pair is trading well below the 1.2250 pivot level and the 100 simple moving average (red, 4-hours). It corrected above the 1.2050 level plus the 38.2% Fib retracement level of the downward move from the 1.2209 high to 1.2014 low.
However, the pair is facing a lot of hurdles on the upside near the 1.2120 and 1.2150 levels. Moreover, there is a declining channel forming with resistance near 1.2135 on the same chart.
Above the channel resistance, the next key resistance is near the 1.2200 area. The main resistance for a strong recovery is near 1.2250, 100 SMA, and the 1.236 Fib extension level of the downward move from the 1.2209 high to 1.2014 low.
If GBP/USD fails to correct above 1.2150 or 1.2200, it could resume it slide. An immediate support is near the 1.2040 level. The main support is near 1.2000, below which there is a risk of heavy downsides in the coming days.
Looking at EUR/USD, the pair remained well supported above the key 1.1150 support level. Gold price is also trading in a positive zone above the $1,480 and $1,482 support levels. On the other hand, USD/JPY extended losses and broke the key 105.50 support area.
Economic Releases to Watch Today
- German Consumer Price Index July 2019 (YoY) – Forecast +1.7%, versus +1.7% previous.
- German Consumer Price Index July 2019 (MoM) – Forecast +0.5%, versus +0.5% previous.
- UK Claimant Count Change July 2019 – Forecast 22.8K, versus 38.0K previous.
- UK ILO Unemployment Rate June 2019 (3M) – Forecast 3.8%, versus 3.8% previous.
- US Consumer Price Index July 2019 (MoM) – Forecast +0.3%, versus +0.1% previous.
- US Consumer Price Index July 2019 (YoY) – Forecast +1.7%, versus +1.6% previous.
- US CPI Ex Food & Energy July 2019 (YoY) – Forecast +2.1%, versus +2.1% previous.
