Key Highlights
- GBP/USD is attempting a recovery wave from the 1.2000 support.
- It is facing resistance near 1.2180 and 1.2220 on the 4-hours chart.
- EUR/USD declined to 1.0655 and remains at a risk of more losses.
- The US Consumer Price Index could decline from 6.5% to 6.2% in Jan 2023 (YoY).
GBP/USD Technical Analysis
The British started a major decline from well above the 1.2350 level against the US Dollar. GBP/USD declined below the 1.2200 support to move into a bearish zone.
Looking at the 4-hours chart, the pair declined below the 1.2160 support zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
There was also a close below the 1.2150 support zone. Finally, it tested the 1.1960 support zone. Recently, the pair started an upside correction and traded above 1.2120. It cleared the 38.2% Fib retracement level of the key decline from the 1.2401 swing high to 1.1961 low.
However, the pair struggled to clear 1.2180 and the 200 simple moving average (green, 4-hours). It is near the 50% Fib retracement level of the key decline from the 1.2401 swing high to 1.1961 low.
The next major resistance is near the 1.2220 level. A clear move above the 1.2220 resistance might start a steady increase towards the 1.2300 resistance zone.
Any more gains could open the doors for a move towards the 1.2400 level, above which the bulls may perhaps aim a retest of the 1.2440 resistance.
Looking at EUR/USD, the pair traded to a new monthly low near 1.0655 and remains at a risk of more losses in the near term.
Economic Releases
- UK Claimant Count Change for Jan 2023 – Forecast 3.0K, versus 19.7K previous.
- UK ILO Unemployment Rate for Dec 2022 (3M) – Forecast 3.7%, versus 3.7% previous.
- US Consumer Price Index for Jan 2023 (MoM) – Forecast +0.5%, versus +0.1% previous.
- US Consumer Price Index for Jan 2023 (YoY) – Forecast +6.2%, versus +6.5% previous.
- US Consumer Price Index Ex Food & Energy for Jan 2023 (YoY) – Forecast +5.5%, versus +5.7% previous.
