Key Highlights
- GBP/USD climbed higher and tested the 1.2000 resistance zone.
- A major bullish trend line is forming with support near 1.1740 on the 4-hours chart.
- Crude oil price gained bearish momentum below the $80.00 support.
- Canada’s retail sales could decline 0.7% in Sep 2022 (MoM).
GBP/USD Technical Analysis
The British Pound started a major increase above the 1.1650 and 1.1750 resistance levels against the US Dollar. GBP/USD even broke the 1.1800 resistance zone.
Looking at the 4-hours chart, the pair settled above the 1.1700 level, the 100 simple moving average (red, 4-hours) plus the 200 simple moving average (green, 4-hours).
It traded as high as 1.2029 and recently started a downside correction. It traded below the 1.1950 support level. There was a move below the 23.6% Fib retracement level of the upward move from the 1.1145 swing low to 1.2029 high.
An initial support is near the 1.1750 level. There is also a major bullish trend line forming with support near 1.1740 on the same chart.
The next major support is near the 1.1700 zone, below which the pair might test the 100 simple moving average (red, 4-hours). It is near the 50% Fib retracement level of the upward move from the 1.1145 swing low to 1.2029 high.
The main support sits at 1.1500. A close below the 1.1500 level might start another strong decline. In the stated case, GBP/USD could decline towards the 1.1200 support.
On the upside, an immediate resistance is near 1.1920 level. The next major resistance may perhaps be near 1.2000. Any more gains could set the pace for a move towards the 1.2250 resistance zone.
Looking at oil price, the bears remained in action and there was a strong decline below the $80.00 support zone.
Economic Releases
- Canadian Retail Sales for Sep 2022 (MoM) – Forecast -0.7%, versus +0.7% previous.
- Canadian Retail Sales ex Autos for Sep 2022 (MoM) – Forecast -0.4%, versus +0.7% previous.
