Sat, Oct 23, 2021 @ 01:04 GMT
HomeContributorsTechnical AnalysisGBP/USD Facing Major Hurdle Near 1.3780

GBP/USD Facing Major Hurdle Near 1.3780

Key Highlights

  • GBP/USD started an upside correction from the 1.3600 zone.
  • It is facing a crucial resistance near 1.3770 and 1.3780 on the 4-hours chart.
  • EUR/USD is struggling to recover above 1.1750.
  • Crude oil price rallied above the $75.00 resistance zone.

GBP/USD Technical Analysis

The British Pound started a fresh decline from well above 1.3850 against the US Dollar. GBP/USD traded below the key 1.3800 support zone to enter a bearish zone.

Looking at the 4-hours chart, there was a break below a key bullish trend line at 1.3780. The pair settled below the 1.3750 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair traded as low as 1.3609 and recently started an upside correction. There was a break above the 1.3700 resistance. The pair cleared the 23.6% Fib retracement level of the key decline from the 1.3913 high to 1.3609 low.

The pair is now facing a strong resistance near the 1.3770 and 1.3780 levels. The 50% Fib retracement level of the key decline from the 1.3913 high to 1.3609 low is sitting near the 1.3760 level.

Besides the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours) are positioned near 1.3780. Therefore, a close above 1.3780 could open the doors for a steady increase.

If not, the pair could resume its decline below 1.3650. The next key support is near 1.3620, below which the pair may possibly dive towards 1.3550.

Looking at EUR/USD, the pair is trading well below the 1.1750 resistance zone and it remains at a risk of more downsides.

Economic Releases

  • Germany’s GfK Consumer Confidence for Oct 2021 – Forecast -1.8, versus -1.2 previous.
  • S&P/Case-Shiller Home Price Indices for July 2021 (YoY) – Forecast +20%, versus +19.1% previous.

 

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