Key Highlights
- GBP/USD is holding gains above the 1.3550 support.
- A crucial bullish trend line is forming with support near 1.3580 on the 4-hours chart.
- EUR/USD must clear 1.1400 to start a fresh increase.
- The US Manufacturing PMI could increase to 56.0 from 55.5 in Feb 2022 (Preliminary).
GBP/USD Technical Analysis
The British Pound started a decent increase from 1.3485 against the US Dollar. GBP/USD gained pace for a move above the 1.3550 resistance level.
Looking at the 4-hours chart, the pair even broke the 1.3600 resistance level. There was a spike towards the 1.3640 resistance, and a close above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
On the upside, the pair might gain strength if there is a close above 1.3640 and 1.3650. The next major resistance is near the 1.3720 level. Any more gains might send the pair towards the 1.3800 level.
If not, GBP/USD might correct lower towards 1.3550. There is also a crucial bullish trend line forming with support near 1.3580 on the same chart.
The next key support is near 1.3540, below which the pair could extend losses. In the stated case, it could revisit the 1.3500 zone.
Fundamentally, the UK PMI manufacturing for Feb 2022 (Prelim) was released yesterday by both the Chartered Institute of Purchasing & Supply and Markit Economics. The market was looking for a minor decline from 57.3to 57.2.
The actual result was positive, as the UK PMI manufacturing posted a strong increase of 57.3 in Feb 2022. More importantly, the PMI services saw a rise from 54.1 to 60.8.
Looking at EUR/USD, the pair must settle above the 1.1380 and 1.1400 resistance levels to start a steady increase in the near term.
Economic Releases
- German IFO Business Climate Index for Feb 2022 – Forecast 96.5, versus 95.7 previous.
- US Manufacturing PMI for Feb 2022 (Preliminary) – Forecast 56.0, versus 55.5 previous.
- US Services PMI for Feb 2022 (Preliminary) – Forecast 53.0, versus 51.2 previous.
