Key Highlights
- GBP/USD started a downside correction below the 1.2950 support.
- It traded below a major bullish trend line with support near 1.2850 on the 4-hour chart.
- Crude oil prices climbed further higher above the $77.20 resistance.
- The UK Manufacturing PMI declined further from 46.5 to 45 in July 2023 (Prelim).
GBP/USD Technical Analysis
The British Pound struggled to clear the 1.3150 resistance against the US Dollar. GBP/USD started a downside correction below the 1.3000 and 1.2950 support levels.
Looking at the 4-hour chart, the pair traded below a major bullish trend line with support near 1.2850. There was a move below the 50% Fib retracement level of the upward move from the 1.2590 swing low to the 1.3142 high.
The pair settled below the 100 simple moving average (red, 4 hours). However, the bulls are now protecting the 1.2800 support and the 61.8% Fib retracement level of the upward move from the 1.2590 swing low to the 1.3142 high.
The next major support is near the 200 simple moving average (green, 4 hours), below which GBP/USD could slide toward the 1.2600 zone.
On the upside, the pair might face resistance near the 1.2865 level and the 100 simple moving average (red, 4 hours). The next resistance is near the 1.2940 level. Any more gains might send the pair toward the 1.3000 level.
Looking at crude oil prices, there was a steady increase above $76.50 and the bulls seem to be aiming for a move toward $80.
Economic Releases
- US Housing Price Index for May 2023 (MoM) – Forecast +0.2%, versus +0.7% previous.
