Key Highlights
- The British Pound found support near the 1.2660 level and recovered nicely against the US Dollar.
- There was a break above a connecting bearish trend line at 1.2720 on the 4-hours chart of GBP/USD.
- Recently, the German PPI for July 2018 posted a 0.2% rise (MoM), less than the last +0.3%.
- Today, the UK CBI Industrial Trends Orders for August 2018 will be released, which is forecasted to decline from 11 to 8 (MoM).
GBPUSD Technical Analysis
The British Pound was under a lot of pressure until buyers appeared near the 1.2660 level against the US Dollar. The GBP/USD pair started an upward move and corrected above the 1.2700 level.
Looking at the 4-hours chart, the pair gained traction and moved above the 1.2700 and 1.2725 resistances. More importantly, there was a break above a connecting bearish trend line at 1.2720.
It has opened the doors for more gains above the 1.2780 level, which is the 23.6% Fib retracement level of the last decline from the 1.3172 high to 1.2660 low. However, there is a crucial resistance and a bearish trend line waiting near the 1.2820 level.
Moreover, the 38.2% Fib retracement level of the last decline from the 1.3172 high to 1.2660 low is positioned near the 1.2850 level. Therefore, should the pair continue to move higher from the current levels, it could face a strong resistance near the 1.2840 and 1.2850 levels.
On the downside, the 1.2740 level is a decent support, below which, the recent low of 1.2660 is likely to prevent losses. If the pair break the 1.2660 low, there could be more losses towards the 1.2600 level in the near term.
Economic Releases to Watch Today
- UK’s CBI Industrial Trends Survey Orders August 2018 (MoM) – Forecast 9, versus 11 previous.
- Swiss Trade Balance for July 2018 – Forecast 2,850M, versus 2,591M previous.
