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GBP/USD Approaching Crucial Resistance Near 1.3300

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Technical analysis of Forex market

Key Highlights

  • The British Pound recovered nicely after trading towards the 1.3000 support against the US Dollar.
  • A major bullish trend line is in place with support at 1.3120 on the 4-hours chart of GBP/USD.
  • The Chicago Fed National Activity Index (CFNAI) declined from -0.25 to -0.29 in Feb 2019.
  • The US Consumer Confidence in March 2019 could increase from 131.4 to 132.0.

GBPUSD Technical Analysis

The British Pound started a solid upward move after buyers defended the 1.3000 support against the US Dollar. The GBP/USD pair traded above the 1.3140 resistance to move into a positive zone.

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Looking at the 4-hours chart, the pair surpassed the key 1.3150 resistance level and settled above the 200 simple moving average (4-hours, green) and 100 simple moving average (4-hours, red).

There was a break above the 50% Fib retracement level of the last drop from the 1.3383 high to 1.3004 low. The pair even broke the 1.3200 and 1.3210 resistance levels.

The next key resistance is near the 1.3290 level and the 76.4% Fib retracement level of the last drop from the 1.3383 high to 1.3004 low. However, the main resistance is near the 1.3300-1.3320 zone, which acted as a hurdle for buyers on many occasions earlier.

On the downside, an initial support is near the 1.3150 level. There is also a major bullish trend line in place with support at 1.3120, positioned along with the 200 simple moving average (4-hours, green).

Fundamentally, the Chicago Fed National Activity Index (CFNAI) for Feb 2019 was released by the Federal Reserve Bank of Chicago. The market was looking for a rise from the last reading of -0.43 to -0.30.

However, the actual result was mixed as the CFNAI came in at -0.29, down from the last revised reading of -0.43. The report added:

Two of the four broad categories of indicators that make up the index decreased from January, and three of the four categories made negative contributions to the index in February.

Overall, dips remain supported in GBP/USD towards 1.3150 and 1.3120 and the pair seems to be approaching a significant hurdle near 1.3300.

Economic Releases to Watch Today

  • US Housing Starts Feb 2019 (MoM) – Forecast 1.215M, versus 1.230M previous.
  • US Building Permits Feb 2019 (MoM) – Forecast 1.300M, versus 1.317M previous.
  • US Consumer Confidence March 2019 – Forecast 132.0, versus 131.4 previous.

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