Key Highlights
- GBP/USD declined steadily before the bulls appeared at 1.2800.
- It cleared a connecting bearish trend line with resistance at 1.2840 on the 4-hour chart.
- Gold started a fresh increase and surpassed the $2,400 resistance.
- EUR/USD remained stable above the 1.0800 pivot zone.
GBP/USD Technical Analysis
The British Pound started a downside correction from the 1.3050 zone against the US Dollar. GBP/USD dipped below 1.2920 before the bulls appeared.
Looking at the 4-hour chart, the pair tested the 1.2800 support zone and remained stable above the 200 simple moving average (green, 4-hour). A low was formed at 1.2806 and the pair is now attempting a recovery wave.
There was a move above a connecting bearish trend line with resistance at 1.2840. On the upside, the pair could face resistance near the 1.2900 level and the 100 simple moving average (red, 4-hour). It is close to the 38.2% Fib retracement level of the downward move from the 1.3044 swing high to the 1.2806 low.
The next resistance sits at 1.2925 or the 50% Fib retracement level of the downward move from the 1.3044 swing high to the 1.2806 low.
The main hurdle sits at 1.2950. A clear move above the 1.2950 resistance might send it toward the 1.3000 level. Any more gains might open the doors for a test of the 1.3050 zone in the coming days.
Immediate support is near the 1.2800 level. The next major support is near the 1.2780 level. A downside break and close below the 1.2780 support zone could open the doors for more losses. In the stated case, GBP/USD might decline toward the 1.2720 level.
Looking at Gold, the bulls gained strength and were able to push the price above the $2,400 resistance zone with a positive angle.
Economic Releases
- BoE Interest Rate Decision – Forecast 5.0%, versus 5.25% previous.
- US ISM Manufacturing Index for July 2024 – Forecast 48.8, versus 48.5 previous.
- US Initial Jobless Claims – Forecast 236K, versus 235K previous.
