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GBP/USD Climbs To New 4-Month High Above 1.2900

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Aayush Jindal

Key Highlights

  • GBP/USD climbed higher above the 1.2800 and 1.2850 resistance levels.
  • A crucial bullish trend line is forming with support near 1.2720 on the 4-hours chart.
  • Gold price extended its rally and traded to a new all-time high above $1,980.
  • The US Consumer Confidence (CB) could decline from 98.1 to 94.5 in July 2020.

GBP/USD Technical Analysis

In the past few days, the British Pound followed a bullish path above 1.2700 against the US Dollar. GBP/USD surpassed the main 1.2800 resistance area to move into a positive zone.

Looking at the 4-hours chart, the pair even climbed above the 1.2850 level, and settled well above both the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

Finally, it spiked above 1.2900 and traded to a new 4-month high at 1.2904. It is currently consolidating gains, with an immediate support near the 1.2850 level. It coincides with the 23.6% Fib retracement level of the recent rise from the 1.2643 low to 1.2904 high.

However, the first major support is near the 1.2800 and 1.2780 levels (the breakout zone). The 50% Fib retracement level of the recent rise from the 1.2643 low to 1.2904 high is also near 1.2780.

There is also a crucial bullish trend line forming with support near 1.2720 on the same chart. On the upside, the 1.2900 resistance zone is an initial barrier. A successful close above 1.2900 may perhaps lead the pair towards the 1.3000 resistance.

Overall, GBP/USD could correct lower in the short-term, but it is likely to find support near 1.2850 or 1.2800. Looking at gold price, the bulls seem unstoppable as there was an extended rally above $1,950 and the price traded to a new all-time high above $1,980.

Upcoming Economic Releases

  • US Consumer Confidence July 2020 - Forecast 94.5, versus 98.1 previous.
  • S&P/Case-Shiller Home Price Indices May 2020 (YoY) - Forecast +4%, versus +4% previous.
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