Aayush Jindal
Key Highlights
- GBP/USD is correcting losses from the 1.2620 zone.
- A major bearish trend line is forming with resistance near 1.2750 on the 4-hour chart.
- EUR/USD could struggle to recover above 1.0930.
- Gold prices are at risk of more downsides below $1,880.
GBP/USD Technical Analysis
The British Pound started a major decline from well above 1.3000 against the US Dollar. GBP/USD traded below the 1.2800 support to move into a bearish zone.
Looking at the 4-hour chart, the pair settled below the 1.2765 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).
Finally, the bulls took a stand near 1.2620 and recently the pair started an upside correction. There was a move above the 1.2680 and 1.2700 levels. The pair climbed above the 50% Fib retracement level of the downward move from the 1.2818 swing high to the 1.2616 low.
On the upside, an initial resistance is near the 1.2750 level. There is also a major bearish trend line forming with resistance near 1.2750 on the same chart.
A close above the 1.2750 resistance could start a decent increase. In the stated case, the pair could rise toward the 1.2800 level. Any more gains could start a fresh increase toward the 1.2840 level.
If not, the pair might continue lower below the 1.2685 level. The first key support is seen near the 1.2650 level. If there is a move below 1.2650, the pair could dive toward 1.2620. Any more gains might open the doors for a test of 1.2500.
Looking at Gold, the price is showing bearish signs and there could be more losses below the $1,880 level in the near term.
Economic Releases
- US Existing Home Sales for July 2023 (MoM) - Forecast -0.2%, versus -3.3% previous.