GBP/USD Could Rebound Further Above 1.3200

Technical analysis of Forex market

Key Highlights

  • The British Pound rebounded nicely and traded above 1.3150 against the US Dollar.
  • A major bullish trend line is forming with support near 1.3035 on the 4-hours chart of GBP/USD.
  • The Euro Area Retail Sales in March 2019 increased 1.9% (YoY), better than the 1.8% forecast.
  • UK’s BRC Like-for-Like Retail Sales in April 2019 could increase 2.4% (YoY).

GBPUSD Technical Analysis

This past week, the British Pound formed a strong support near 1.2920 against the US Dollar. As a result, the GBP/USD pair started an upward move and climbed above 1.3000, 1.3040 and 1.3100.

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Looking at the 4-hours chart, the pair rallied sharply from the 1.2986 swing low. It broke the 1.3150 resistance level and settled well above the 100 simple moving average (red, 4-hours).

A new monthly high was formed at 1.3177 and recently the pair corrected lower. It broke the 1.3120 level and tested the 50% Fib retracement level of the last wave from the 1.2986 low to 1.3177 high.

On the downside, there are many supports near the 1.3050, 1.3040 and 1.3035 levels. There is also a major bullish trend line forming with support near 1.3035 on the same chart. Besides, the 76.4% Fib retracement level of the last wave from the 1.2986 low to 1.3177 high is near the 1.3031 level.

Only a daily close below the 1.3000 support and the 200 simple moving average (green, 4-hours) could start a fresh bearish wave in the near term. Conversely, the pair is likely to bounce back above 1.3140 and 1.3150.

On the upside, a clear break above the 1.3177 high might open the doors for a test of the 1.3200 resistance level. The next key resistances are near 1.3220 and 1.3245.

Looking at the other major pairs, EUR/USD is still struggling below the 1.1250 resistance level, and USD/JPY seems to be facing an increase in selling pressure.

Economic Releases to Watch Today

  • UK Halifax House Prices for April 2019 (MoM) – Forecast -2.4%, versus -1.6% previous.
  • US IBD/TIPP Economic Optimism Index May 2019 (MoM) – Forecast 54.2, versus 54.5 previous.
  • UK BRC Like-for-Like Retail Sales April 2019 (YoY) – Forecast +2.4%, versus 1.1% previous.

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