Key Highlights
- The British Pound formed a short-term top at 1.4244 and declined against the US Dollar.
- There is a crucial bullish trend line forming with support at 1.4020 on the 4-hours chart of GBP/USD.
- The S&P/Case-Shiller Home Price Indices in Jan 2018 increased 6.4%, more than the forecast of +6.2% .
- Today, the US GDP report for Q4 2017 will be released, which is forecasted to post a growth of 2.7% (Annualized).
GBP/USD Technical Analysis
This past week, there was a nice upside move in the British Pound above 1.4000 against the US Dollar. The GBP/USD pair recently traded as high as 1.4244 before starting a downside correction.
It seems like a short-term top in place since the pair tested the 50% Fib retracement level of the last wave from the 1.3889 low to 1.4244 high. However, there are many supports on the downside above the 1.4000 level.
The most important one is a crucial bullish trend line with support at 1.4020 on the 4-hours chart. The same trend line is close to the 61.8% Fib retracement level of the last wave from the 1.3889 low to 1.4244 high.
Therefore, if the pair corrects further lower, it is likely to find support near 1.4000-20 in the near term. On the upside, an initial resistance is at 1.4200. A push above the mentioned 1.4200 level may perhaps take the pair towards 1.4220 and 1.4240.
Recently, the US saw the release of the S&P/Case-Shiller Home Price Indices for Jan 2018 by the Standard & Poor’s. The market was looking for a rise of 6.2% in indices compared with the same month a year ago.
However, the actual result was positive since there was a rise of 6.4% in the S&P/Case-Shiller Home Price Indices.
Overall, the US Dollar is showing a few positive signs versus the Euro and the British Pound. Having said that, today’s Gross Domestic Product Q4 2017 release may change the market sentiment in the short term.
Economic Releases to Watch Today
- US Gross Domestic Product Q4 2017 – Forecast 2.7% versus previous 2.5%.
- US Personal Consumption Expenditures Prices for Q4 2017 (QoQ) – Forecast +2.7%, versus +2.7% previous.
- US Core Personal Consumption Expenditures for Q4 2017 (QoQ) – Forecast +1.9%, versus +1.9% previous.
