- The British Pound traded as high as 1.3000 and later corrected lower against the US Dollar.
- There are two bullish trend lines formed with support near 1.2780-1.2800 on the 4-hours chart of GBP/USD.
- China’s GDP in Q4 2018 increased 6.4% (YoY), less than the last 6.5%.
- The UK Claimant Count for Jan 2019 will be released today, which could change 20.0K.
GBPUSD Technical Analysis
This past week, there was a solid upward move above the 1.2900 resistance in the British Pound against the US Dollar. The GBP/USD pair traded as high as 1.3000 and later started a downside correction.
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Looking at the 4-hours chart, the pair declined below the 1.2940 support and the 23.6% Fib retracement level of the last wave from the 1.2668 low to 1.3000 high. The decline was such that the pair even traded below the 1.2900 support, but it stayed well above the 100 simple moving average (red, 4-hours).
It tested the 1.2830 support and the 50% Fib retracement level of the last wave from the 1.2668 low to 1.3000 high. More importantly, there are two bullish trend lines formed with support near 1.2780-1.2800 on the same chart.
Therefore, there are many supports on the downside near the 1.2800 level. Once the current correction is complete, the pair is likely to bounce back above 1.2900 and 1.2940 in the near term.
Fundamentally, China’s GDP report for Q4 2018 was released recently. The market was looking for a change of 6.4% in Q4 2018, compared with the same quarter a year ago.
The actual result was in line with the forecast, but it was less than the last 6.5%. The quarterly change was 1.5%, less than the last 1.6%.
Overall, the result was slightly bearish, pointing slowdown in China. Therefore, there could be short term downsides in GBP/USD and EUR/USD before a fresh upward move.
Economic Releases to Watch Today
- UK Claimant Count Change Jan 2019 – Forecast 20.0K, versus 21.9K previous.
- UK ILO Unemployment Rate Jan 2019 (3M) – Forecast 4.1%, versus 4.1% previous.
- US Existing Home Sales for Dec 2018 (MoM) – Forecast -1.2%, versus +1.9% previous.