GBP/USD Vulnerable to a Drop Below 1.3000

Key Highlights

• GBP/USD is struggling to clear the 1.3150 resistance zone.
• A crucial bearish trend line is forming with resistance near 1.3120 on the 4-hours chart.
• EUR/USD is still trading in a bearish zone below 1.0920.
• Gold price extended gains, and oil price could gain pace above $110.

GBP/USD Technical Analysis

The British Pound started another decline after it failed to clear 1.3150 against the US Dollar. GBP/USD traded below the 1.3100 level to move into a negative zone.

Looking at the 4-hours chart, the pair even traded below the 1.3050 level. There was a move below the 50% Fib retracement level of the upward move from the 1.2972 swing low to 1.3147 high.

It settled well below the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours). There is also a crucial bearish trend line forming with resistance near 1.3120 on the same chart.

The next major resistance is near the 1.3150 level, above which it could start a steady increase. A clear move above the 1.3150 level could push GBP/USD above 1.3200.

The next major resistance is seen near the 1.3250 level. An initial support on the downside is near the 1.3000 level. The next major support is near the 1.2980 level. A downside break below the 1.2980 support level might accelerate losses.

The next major support is near the 1.2950 level. Any more losses may perhaps open the doors for a move towards the 1.2820 level.

Looking at EUR/USD, the pair extended decline towards the 1.0750 and is currently consolidating losses below key hurdles.

Economic Releases

• US Housing Starts for March 2022 (MoM) – Forecast 1.738M, versus 1.769M previous.
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