Sat, Oct 16, 2021 @ 12:52 GMT
HomeContributorsTechnical AnalysisGBP/USD At Risk of More Downsides Below 1.3650

GBP/USD At Risk of More Downsides Below 1.3650

Key Highlights

  • GBP/USD started a fresh decline from the 1.3900 resistance zone.
  • It traded below a major bullish trend line at 1.3810 on the 4-hours chart.
  • EUR/USD extended its decline below the 1.1750 support.
  • USD/JPY failed to clear the key 110.00 resistance zone.

GBP/USD Technical Analysis

The British Pound topped near the 1.3900 zone against the US Dollar. GBP/USD traded as high as 1.3913 and started a major decline.

Looking at the 4-hours chart, the pair traded below the 1.3820 and 1.3800 support levels. There was also a break below a major bullish trend line with support at 1.3810.

The pair gained pace below the 1.3750 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours). It even traded below the 1.3700 level.

If the bears remain in action, the pair could even decline below 1.3620. The next major support is near 1.3600, below which there is a risk of a larger decline. In the stated case, the pair may possibly test 1.3540.

An immediate resistance on the upside is near the 1.3700 level. It is close to the 23.6% Fib retracement level of the recent decline from the 1.3913 swing high to 1.3640 low.

The first major resistance is now forming near the 1.3800 level and the 100 simple moving average (red, 4-hours). The pair must settle above 1.3800 to start a steady increase in the near term.

Looking at EUR/USD, the pair extended its decline below 1.1750, but the bulls are now protecting the 1.1700 support zone.

Economic Releases

  • US Housing Starts for August 2021 (MoM) – Forecast 1.580M, versus 1.534M previous.
  • US Building Permits for August 2021 (MoM) – Forecast 1.610M, versus 1.630M previous.

 

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