GBP/USD Could Correct Further Toward 1.4250

Key Highlights

• The British Pound faced a strong selling interest near the 1.4375 level against the US Dollar.
• There is a crucial bullish trend line in place with support at 1.4280 on the 4-hours chart of GBP/USD.
• The UK Claimant Change in March 2018 was 11.6K, more than the forecast of 5.0K.
• Today, the UK CPI report for March 2018 will be released, which is forecasted to increase by 0.3% (MoM).

GBPUSD Technical Analysis

The British Pound traded nicely above the 1.4300 level against the US Dollar. However, the GBP/USD pair faced a major resistance at 1.4375 and started a downward correction.

Looking at the 4-hours chart, the pair formed a short-term top at 1.4376 and moved lower. An initial support is near the 23.6% Fib retracement level of the last wave from the 1.3965 low to 1.4376 high.

There is also a crucial bullish trend line in place with support at 1.4280 on the same chart. The most important support is near the 1.4250 level, which was a significant resistance earlier and now it will most likely protect declines.

On the upside, the pair must clear the 1.4350-75 region to extend gains. Above 1.4375, the next major hurdle for buyers is around 1.4400.

Recently, the UK saw the release of the Claimant Change by the National Statistics. The market was looking was a chance of 5K in the Claimant Count.

However, the result was disappointing as the change was on the higher side at 11.6K. Moreover, the last reading was revised up from 9.2K to 15.1K. As a result, there was a downside reaction in GBP/USD from the 1.4375 swing high.

If sellers remain in action, the pair could correct further lower towards the 1.4250 support in the near term.

Economic Releases to Watch Today

• UK Consumer Price Index March 2018 (YoY) – Forecast +2.7%, versus +2.7% previous.
• UK Core Consumer Price Index March 2018 (YoY) – Forecast +2.5%, versus +2.4% previous.
• UK Producer Price Index Input March 2018 (YoY) – Forecast +4.1%, versus +3.4% previous.
• Euro Zone CPI for March 2018 (YoY) – Forecast +1.4%, versus +1.4% previous.
• Euro Zone CPI for March 2018 (MoM) – Forecast +1.0%, versus +0.2% previous.
• Euro Zone Core CPI for March 2018 (YoY) – Forecast +1.0%, versus +1.0% previous.
• BoC Interest Rate Decision – Forecast 1.25%, versus 1.25% previous.