- Key Highlights
GBP/USD extended losses and traded below 1.2250.
- A major bearish trend line is forming with resistance near 1.2340 on the 4-hour chart.
- EUR/USD broke the 1.0620 support and is still at risk of more downsides.
- USD/JPY broke the 148.50 resistance and accelerated higher.
GBP/USD Technical Analysis
The British Pound started a fresh decline after it struggled near 1.2420 against the US Dollar. GBP/USD dropped below 1.2350 and 1.2320 to move further into a bearish zone.
Looking at the 4-hour chart, the pair settled below the 1.2250 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).
A new multi-week low was formed near 1.2200 and the pair is still at risk of more downsides. If there is a recovery wave, it could face resistance near the 1.2250 level. The first major resistance is near the 1.2300 zone.
The 50% Fib retracement level of the downward move from the 1.2424 swing high to the 1.2200 area is also near 1.2300. The next major resistance is near the 1.2340 zone. There is also a major bearish trend line forming with resistance near 1.2340 on the same chart.
A close above 1.2340 could start a steady increase toward 1.2420. Any more gains might send GBP/USD toward the 1.2500 resistance. On the downside, initial support is near the 1.2180 level. The next key support is seen near the 1.2150 level, below which it could test 1.2050.
If there is a move below 1.2050, the pair could dive toward 1.2000. Any more losses might send the pair toward the 1.1880 level.
Looking at EUR/USD, there were strong bearish moves and the pair even declined below the 1.0620 support zone.
Economic Releases
- US Housing Price Index for July 2023 (MoM) – Forecast +0.1%, versus +0.3% previous.
- US New Home Sales for August 2023 (MoM) – Forecast 2.1% versus 4.4% previous.
