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GBP/USD Could Struggle Above 1.3900, Oil Extends Rally

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Aayush Jindal

Key Highlights

  • GBP/USD started a minor upside correction from 1.3730.
  • There was a break above a major bearish trend line with resistance near 1.3810 on the 4-hours chart.
  • The UK Services PMI increased from 61.7 to 62.4 in June 2021.
  • The US ISM Services PMI is likely to remain strong near 63.5 in June 2021.

GBP/USD Technical Analysis

The British Pound extended its decline below 1.3800 against the US Dollar. GBP/USD traded as low as 1.3731 before it started an upside correction.

Looking at the 4-hours chart, the pair recovered above the 1.3800 resistance zone. It even surpassed a major bearish trend line with resistance near 1.3810. Moreover, the pair broke the 50% Fib retracement level of the recent decline from the 1.4001 high to 1.3731 low.

An immediate resistance is near the 1.3900. It is close to the 61.8% Fib retracement level of the recent decline from the 1.4001 high to 1.3731 low.

The first major resistance is near the 1.3910 zone. The next major resistance sits near 1.3940 and the 100 simple moving average (red, 4-hours).

On the downside, there is a key support forming near 1.3800. The next major support is near the 1.3780 level, below which the pair could revisit 1.3730.

Overall, GBP/USD could gain momentum if it is able to surpass 1.3900 and 1.3910. Similarly, EUR/USD must climb above 1.1950 to start a decent recovery wave.

Economic Releases

  • US Markit Services PMI for June 2021 – Forecast 63.9, versus 63.9 previous.
  • US ISM Services PMI for June 2021 – Forecast 63.5, versus 64.0 previous.
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