Key Highlights
- GBP/USD started a strong increase above 1.3500 and 1.3800.
- There was a break above a crucial bearish trend line at 1.3330 on the monthly chart.
- A major barrier is forming near the 1.4200 and 1.4350 levels.
- EUR/USD is still facing hurdles near 1.2150, but it is stable above 1.2080.
GBP/USD Technical Analysis
After trading as low as 1.1421 (March 2020), the British Pound started a fresh increase against the US Dollar. GBP/USD surpassed many hurdles near 1.3000 and 1.3500, but it is now approaching a key resistance on monthly chart.
Looking at the monthly chart, the pair gained pace after it broke the 1.3200 resistance. There was also a break above a crucial bearish trend line at 1.3330. The pair surpassed the last swing high at 1.3514 and it cleared the 1.3800 resistance.
On the upside, the first key resistance is near the 1.4000 level. It is close to the 1.236 Fib extension level of the downward move from the 1.3514 high to 1.1421 low.
The next major resistance sits near the 1.4200 level and the 100-month simple moving average (red). To continue higher in the long term, the pair must surpass the 1.4200 and 1.4350 resistance levels.
If there is no upside break above 1.4000 or 1.4200, there could be a fresh decline. On the downside, the first key support is near the 1.3500 level. The main support is now forming near the broken trend line and 1.3200.
Looking at EUR/USD, the pair is struggling to clear the 1.2150 resistance level. Conversely, crude oil price remains elevated and it recently traded as high as $60.93.
Economic Releases
- Euro Zone Gross Domestic Product Q4 2020 (Preliminary) (QoQ) – Forecast -0.7%, versus -0.7% previous.
- German ZEW Business Economic Sentiment Index Feb 2021 – Forecast 59.5, versus 61.8 previous.
