Key Highlights
- GBP/USD started a downside correction from the 1.2450 zone.
- A key bearish trend line is forming with resistance near 1.2080 on the 4-hours chart.
- EUR/USD corrected lower from the 1.0735 level and declined below 1.0620.
- The US ISM Manufacturing Index could decline from 49.0 from 48.5 in Dec 2022.
GBP/USD Technical Analysis
The British Pound started a fresh decline from well above the 1.2400 level against the US Dollar. GBP/USD declined below the 1.2200 support zone to move into a short-term bearish zone.
Looking at the 4-hours chart, the pair even declined below the 1.2000 level. There was a close below the 1.2050 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
The pair traded as low as 1.1900 and recently started a minor upside correction. The pair climbed above the 1.2000 level, but there are many hurdles on the upside.
On the upside, an initial resistance is near the 1.2080 level. There is also a key bearish trend line forming with resistance near 1.2080 on the same chart. The next major resistance may perhaps be near 1.2150.
A clear move above the 1.2150 resistance might start a steady increase. In the stated case, GBP/USD may perhaps rise towards the 1.2200 level or even 1.2250.
On the downside, there is a key support at 1.1950. The main support is now forming near the 1.1900 level. A downside break below the 1.1900 zone might trigger another drop. The next major support sits near the 1.1800 level. Any more losses might open the doors for a move towards the 1.1650 support zone.
Looking at EUR/USD, the pair struggled to clear the 1.0735 resistance zone and started a short-term downside correction.
Economic Releases
- Germany’s Services PMI for Dec 2022 – Forecast 49.0, versus 49.0 previous.
- Euro Zone Services PMI for Dec 2022 – Forecast 49.1, versus 49.1 previous.
- US ISM Manufacturing Index for Dec 2022 – Forecast 48.5, versus 49.0 previous.
- FOMC Meeting Minutes.
