Key Highlights
- GBP/USD corrected lower after trading to a new multi-month high at 1.4242.
- There was a break below a key triangle with support at 1.3970 on the 4-hours chart.
- EUR/USD extended its decline, but it is still holding the 1.2000 support.
- The Eurozone CPI could increase 1% in Feb 2021 (YoY) (Prelim).
GBP/USD Technical Analysis
This past week, the British Pound extended its rally above 1.4100 against the US Dollar. GBP/USD traded to a new multi-month high at 1.4242 before starting a downside correction.
Looking at the 4-hours chart, the pair declined below the 1.4200 and 1.4100 support levels. There was also a break below a key triangle with support at 1.3970. The pair even traded below the 61.8% Fib retracement level of the upward move from the 1.3829 low to 1.4242 high.
An immediate support is near the 1.3900 zone and the 100 simple moving average (red, 4-hours). The next major support is near the 1.3800 level and the 200 simple moving average (green, 4-hours).
Any more losses could lead the pair towards 1.3730. It is close to the 1.236 Fib extension level of the upward move from the 1.3829 low to 1.4242 high. On the upside, the pair could face hurdles near 1.4000. A close above 1.4000 may possibly clear the path for a fresh bullish wave.
Fundamentally, the UK Manufacturing PMI for Feb 2021 was released yesterday by both the Chartered Institute of Purchasing & Supply and Markit Economics. The market was looking for no change from 54.9.
The actual result was better than the forecast, as the UK Manufacturing PMI increased from 54.9 to 55.1 (2-month high).
Looking at EUR/USD, the pair traded below 1.2050, but it is stable above 1.2000. Besides, gold price extended its decline below the $1,750 support zone.
Economic Releases
- Euro Zone CPI for Feb 2021 (YoY) (Prelim) – Forecast +1.0%, versus +0.9% previous.
- Euro Zone Core CPI for Feb 2021 (YoY) (Prelim) – Forecast +1.1%, versus +1.4% previous.
- Canadian Gross Domestic Product for Q4 2020 (Annualized) – Forecast +7.2%, versus 40.5% previous.
