Thu, Feb 09, 2023 @ 05:43 GMT
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GBP/USD Eyes Upside Break, US CPI Next

Key Highlights

  • GBP/USD could rally further above the 1.2350 and 1.2400 levels.
  • A major bullish trend line is forming with support near 1.2225 on the 4-hours chart.
  • The UK Claimant count could change -13.3K in Nov 2022.
  • The US CPI could increase 7.3% in Nov 2022 (YoY), down from +7.7%.

GBP/USD Technical Analysis

The British started a fresh increase above 1.2000 against the US Dollar. GBP/USD settled above the 1.2120 level to move into a positive zone.

Looking at the 4-hours chart, the pair gained pace above the 1.2150 level. The pair even settled above the 1.2200 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

This past week, the pair attempted an upside break above 1.2350 but failed. As a result, there was a downside correction to 1.2100. It remained well supported and started a fresh increase above 1.2200.

There is also a major bullish trend line forming with support near 1.2225 on the same chart. The next major support is near the 1.2120 zone.

Any more losses might send the pair towards the 1.2080 support zone and the 100 simple moving average (red, 4-hours). If the bears push the pair further lower, there might be a test of the 1.1840 support zone.

On the upside, the pair is facing resistance near the 1.2320. The next major resistance may perhaps be near 1.2350. A clear move above the 1.2350 resistance might start another decent increase.

In the stated case, GBP/USD may perhaps test 1.2420. Any more gains could set the pace for a move towards the 1.2500 resistance zone.

Looking at EUR/USD, the pair is also showing bullish signs and there are chances of a move above the 1.0620 resistance zone.

Economic Releases

  • UK Claimant Count Change for Nov 2022 – Forecast -13.3K, versus -3.3K previous.
  • UK ILO Unemployment Rate Oct 2022 (3M) – Forecast 3.7%, versus 3.6% previous.
  • US Consumer Price Index for Nov 2022 (MoM) – Forecast +0.3%, versus +0.4% previous.
  • US Consumer Price Index for Nov 2022 (YoY) – Forecast +7.3%, versus +7.7% previous.
  • US Consumer Price Index Ex Food & Energy for Nov 2022 (YoY) – Forecast +6.1%, versus +6.3% previous.
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