Key Highlights
- GBP/USD rallied recently above the 1.2900 and 1.2950 resistance levels.
- There was a break above a major bearish trend line at 1.2920 on the 4-hours chart.
- A strong resistance is waiting on the upside near 1.3000.
- The US Housing starts could increase 0.6% in Oct 2019 (MoM).
GBP/USD Technical Analysis
After a downside correction, the British Pound found support near the 1.2820 area against the US Dollar. A support base was formed and the pair climbed back above the 1.2900 resistance.
Looking at the 4-hours chart, the pair gained bullish momentum after it surpassed the 1.2900 resistance and the 100 simple moving average (red, 4-hours). As a result, there was a break above a major bearish trend line at 1.2920.
The pair even broke the 76.4% Fib retracement level of the downward move from the 1.2975 high to 1.2768 low. On the upside, there are many important resistances near the 1.3000 and 1.3020 levels.
Besides, the 1.236 Fib extension level of the downward move from the 1.2975 high to 1.2768 low might act as a resistance near 1.3024. If there is a successful break above 1.3000 and 1.3024, GBP/USD could rally further towards the 1.3050 and 1.3080 levels.
On the downside, the recent breakout resistance near the 1.2920-1.2930 area is likely to provide support if there is a short term correction. The main support on the downside is now near 1.2880 and the 100 simple moving average (red, 4-hours).
Looking at EUR/USD, the pair is still facing a strong resistance near the 1.1080 level, above which it could rally towards 1.1120 or even 1.1150. Conversely, USD/JPY is once again correcting lower towards the 108.20 support area.
Upcoming Economic Releases
- US Housing Starts Oct 2019 (MoM) – Forecast 1.320M, versus 1.256M previous.
- US Building Permits Oct 2019 (MoM) – Forecast 1.385M, versus 1.391M previous.
