Key Highlights
- GBP/USD started an upside correction above the 1.1650 resistance.
- It broke a major bearish trend line at 1.1580 on the 4-hours chart.
- The UK Claimant count could change -9.2K in August 2022.
- The US CPI might rise 8.1% in August 2022 (YoY), down from 8.5%.
GBP/USD Technical Analysis
The British Pound started a steady recovery wave from the 1.1405 low against the US Dollar. GBP/USD cleared the 1.1500 and 1.1550 resistance levels to gain bullish momentum.
Looking at the 4-hours chart, the pair was able to clear the 1.1600 resistance zone and a major bearish trend line at 1.1580. There was a move above the 23.6% Fib retracement level of the downward move from the 1.2276 swing high to 1.1405 low.
The bulls were able to push the pair above the 1.1680 level and the 100 simple moving average (red, 4-hours). The pair is now facing resistance near the 1.1740 zone.
The next major resistance is near the 1.1840 level or the 200 simple moving average (green, 4-hours). It is near the 50% Fib retracement level of the downward move from the 1.2276 swing high to 1.1405 low.
Any more gains might send GBP/USD higher towards the 1.1940 resistance zone. The next major resistance is near 1.2000, above which the pair may perhaps rise towards the 1.2120 level.
If there is a fresh decline, the pair might find bids near the 1.1650 level. A downside break below the 1.1650 support might sent it to 1.1600. The next major support is near the 1.1550 level, below which the pair could even test the 1.1500 level.
Looking at EUR/USD, the pair was able to start a recovery wave above the 1.0050 and 1.0100 resistance levels. The next major resistance is near 1.0200.
Economic Releases
- UK Claimant Count Change for August 2022 – Forecast -9.2K, versus -10.5K previous.
- UK ILO Unemployment Rate for July 2022 (3M) – Forecast 3.8%, versus 3.8% previous.
- US Consumer Price Index for August 2022 (MoM) – Forecast -0.1%, versus 0% previous.
- US Consumer Price Index for August 2022 (YoY) – Forecast +8.1%, versus +8.5% previous.
- US CPI Ex Food & Energy for August 2022 (YoY) – Forecast +6.0%, versus +5.9% previous.
