Key Highlights
- GBP/USD started a fresh increase above the 1.3800 resistance.
- It broke a key bearish trend line with resistance near 1.3800 on the 4-hours chart.
- EUR/USD is struggling to stay above the key 1.1780 support zone.
- The US CPI could increase 5.2% in August 2021 (YoY), down from 5.4%.
GBP/USD Technical Analysis
The Euro started a fresh increase from the 1.3725 zone against the US Dollar. GBP/USD broke the 1.3800 resistance to move into a positive zone.
Looking at the 4-hours chart, the pair also surpassed a key bearish trend line with resistance near 1.3800. It settled above the 1.3800 level, the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours).
However, the bulls struggled to clear the main 1.3880 resistance zone. A high was formed near 1.3888 before there was a downside correction. There was a break below the 1.3850 and 1.3825 support levels.
The pair even tested the 50% Fib retracement level of the upward move from the 1.3726 swing low to 1.3888 high. On the upside, an initial resistance is near the 1.3865 level. The first major resistance is near the 1.3880 level, above which GBP/USD might rise towards the 1.4000 level.
On the downside, there is a major support forming near the 1.3800 zone. The next major support is near the 1.3765 level and the 100 simple moving average (red, 4-hours). Any more losses might push the pair towards the 1.3725 support zone in the near term.
Looking at EUR/USD, the pair extended its decline below 1.1800, but the bulls are still fighting near the key 1.1780 level.
Economic Releases
- UK Claimant Count Change for August 2021 – Forecast -71.7K, versus -7.8K previous.
- UK ILO Unemployment Rate for July 2021 (3M) – Forecast 4.6%, versus 4.7% previous.
- US CPI for August 2021 (MoM) – Forecast +0.4%, versus +0.5% previous.
- US CPI for August 2021 (YoY) – Forecast +5.2%, versus +5.4% previous.
- US CPI Ex Food & Energy for August 2021 (YoY) – Forecast +4.2%, versus +4.3% previous.
