GBP/USD Struggling Ahead Of UK Jobs Report

Technical analysis of Forex market

Key Highlights

  • GBP/USD recovered above 1.3000, but it is struggling to clear the 1.3050-1.3060 resistance.
  • A key bearish trend line is forming with resistance near 1.3040 on the 4-hours chart.
  • The UK ILO Unemployment Rate is likely to remain at 3.8% in Dec 2019 (3M).
  • The UK Claimant Count could change 22.6K in Jan 2020, less than the last 14.9K.

GBP/USD Technical Analysis

This past week, the British Pound started a decent recovery wave from 1.2871 against the US Dollar. GBP/USD climbed above the 1.2920 and 1.3000 resistance levels to enter a positive zone, but it struggled to continue higher.

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Looking at the 4-hours chart, the pair climbed above the 38.2% Fib retracement level of the last major decline from the 1.3209 high to 1.2871 low.

However, the pair struggled to gain strength above the 1.3050 resistance area, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

Moreover, it failed to settle above the 50% Fib retracement level of the last major decline from the 1.3209 high to 1.2871 low. As a result, the pair is currently declining and trading below 1.3020.

Besides, there was a break below a connecting bullish trend line with support near 1.3015. If the pair settles below 1.3000 and 1.2980, it could resume its decline towards 1.2950 and 1.2920.

On the upside, there are many hurdles forming near 1.3050 and 1.3060. Additionally, there is a key bearish trend line forming with resistance near 1.3040 on the same chart.

Therefore, the pair must climb above the 1.3050 resistance area and the 100 SMA to continue higher in the near term.

Upcoming Economic Releases

  • UK Claimant Count Change Jan 2020 – Forecast 22.6K, versus 14.9K previous.
  • UK ILO Unemployment Rate Dec 2019 (3M) – Forecast 3.8%, versus 3.8% previous.
  • German ZEW Business Economic Sentiment for Feb 2020 – Forecast 21.5, versus 26.7 previous.