GBP/USD Could Rally If It Clears 1.3800

Technical analysis of Forex market

Key Highlights

  • GBP/USD started a decent increase above the 1.3650 resistance.
  • A major rising channel is forming with support near 1.3690 on the 4-hours chart.
  • EUR/USD is facing an uphill task near the 1.1650 region.
  • Gold price declined heavily from the $1,800 resistance zone.

GBP/USD Technical Analysis

The British Pound started a steady increase above the 1.3650 resistance against the US Dollar. GBP/USD broke the 1.3700 resistance zone to enter a positive zone.

Looking at the 4-hours chart, the pair was able to recover above the 1.3700 resistance. The pair surpassed the 50% Fib retracement level of the downward move from the 1.3912 swing high to 1.3415 low.

It settled above the 1.3720 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair is now facing resistance near the 1.3800 zone. A close above 1.3800 could open the doors for a larger increase. The next key resistance is near the 1.3880 level. Any more gains could lift the pair towards the 1.3950 level.

An immediate support is near the 1.370 level. There is also a major rising channel forming with support near 1.3690 on the same chart. The next major support is near 1.3650.

Looking at EUR/USD, the pair could start a steady recovery wave if there is a clear break above the 1.1650 resistance zone.

Economic Releases

  • US Housing Starts for Sep 2021 (MoM) – Forecast 1.620M, versus 1.615M previous.
  • US Building Permits for Sep 2021 (MoM) – Forecast 1.680M, versus 1.728M previous.