Sat, Feb 04, 2023 @ 13:09 GMT
HomeContributorsTechnical AnalysisGBP/USD Could Rally Further If It Clears 1.2300

GBP/USD Could Rally Further If It Clears 1.2300

Key Highlights

  • GBP/USD started a fresh increase above the 1.2200 resistance.
  • It surpassed a major bearish trend line with resistance near 1.2050 on the 4-hours chart.
  • EUR/USD might struggle to clear the 1.0920 resistance zone.
  • The UK ILO Unemployment rate could remain at 3.7% in Nov 2022 (3M).

GBP/USD Technical Analysis

The British Pound started a fresh increase above the 1.2150 resistance zone against the US Dollar. GBP/USD broke the 1.2200 resistance to move into a positive zone.

Looking at the 4-hours chart, the pair surpassed a major bearish trend line with resistance near 1.2050. It opened the doors for a move above the 1.2200 resistance, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

There was a clear move above the 50% Fib retracement level of the key decline from the 1.2446 swing high to 1.1841 low. On the upside, an initial resistance is near the 1.2300 level.

The next major resistance may perhaps be near 1.2345. A clear move above the 1.2345 resistance might start a steady increase. In the stated case, GBP/USD could even surpass the 1.2500 zone. The next key hurdle is near 1.2620, above which the pair could climb towards the 1.2800 resistance zone.

On the downside, there is a major support at 1.2120. The next major support is near the 1.2050 level. A downside break below the 1.2050 zone might push the pair lower.

The next major support sits near the 1.2000 level. Any more losses might open the doors for a move towards the 1.1850 support zone.

Looking at EUR/USD, the pair is struggling to gain pace for a clear move above a key barrier near the 1.0920 resistance.

Economic Releases

  • UK Claimant Count Change for Dec 2022 – Forecast 11.0K, versus 30.5K previous.
  • UK ILO Unemployment Rate for Nov 2022 (3M) – Forecast 3.7%, versus 3.7% previous.
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