Forex News Daily Market Analysis By FXOpen

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GBP/USD Analysis: Price Approaches Important Support

In November, the 1.25 level acted as resistance, but after a bullish breakout, it began to provide support (as shown by the black arrows).

However, recent events are increasing bearish pressure. Among them:

→ yesterday's news on inflation in the US, the values of which were in line with expectations. It is worth paying attention to Core CPI MoM, the values of which remain equal to 0.3%, or 3.6% in annual terms. This category includes prices for services where inflation is difficult to overcome. So Powell's oft-repeated words that “the path to 2% will be difficult” take on more relevance. Today, by the way, another speech by the head of the Fed is scheduled for 22:30 GMT+3. It will take place after the announcement of interest rates at 22:00 GMT+3, which is expected to remain unchanged.
→ news today that the UK economy contracted in October. GDP decreased by -0.3%, although -0.1% was expected. This could strengthen the case that the Bank of England at its meeting (tomorrow at 15:00 GMT+3) will signal a faster rate cut than in other countries.

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Will the BoE Reduce Interest Rates or Not? Markets Appear Nonchalant

The Bank of England is expected to keep interest rates at the current level at tomorrow's meeting and is not actively pursuing further increases in the near future. More intriguingly, economists are now contemplating the possibility of a reduction in interest rates in the upcoming new year. This development, if realised, could carry noteworthy implications for both the British public and businesses.

The potential shift in policy is anticipated to be welcomed by a broad spectrum of the British populace, encompassing both commercial entities and private individuals. The prospect of reduced interest rates holds the promise of easing financial burdens, particularly on mortgage payments. Such a scenario would likely translate into increased disposable income for the public, empowering them to resume previous spending patterns. Simultaneously, businesses could find relief as lower interest rates would facilitate easier servicing of monthly commitments, allowing for redirected funds towards development, growth, and expansion initiatives.

Comparisons with the economic landscape of the United States reveal distinctive differences in approach. While both the UK and the US faced challenges of inflation surges, the UK's inflation rate, though reduced, remains at a level of just over 5.6%. In contrast, the US has achieved a lower inflation rate of 3.2%. Despite this, the Bank of England is diverging from the US policy trajectory by contemplating a departure from further interest rate hikes.

A key metric distinguishing the two economies is the national debt, with the UK presenting a substantially lower debt level on both a percentage and per capita basis. Furthermore, the absence of financial institution collapses, a contrast to events in the US earlier in the year, contributes to a relatively more stable financial environment in the UK.

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EUR/USD, GBP/USD, USD/JPY Analysis: Dollar Falling ahead of Fed Report

At the upcoming meeting, the American department is not expected to take steps aimed at changing monetary parameters. At the same time, officials will likely abandon overly hawkish or dovish rhetoric and focus on incoming macroeconomic data. November inflation statistics were published yesterday: as expected, the rate of growth in consumer prices accelerated from 0.0% to 0.1% in monthly terms and slowed down from 3.2% to 3.1% in annual terms, and the figure does not take into account prices for food and energy adjusted from 0.2% to 0.3%. During the day, November statistics on manufacturing inflation will be published in the US: forecasts suggest a further slowdown in annual dynamics from 1.3% to 1.0%, while in monthly terms the indicator may show an increase of 0.1% after -0.5% in the previous month.
EUR/USD

The EUR/USD pair shows mixed trading dynamics, consolidating near the 1.0785 mark. According to the EUR/USD technical analysis, immediate resistance can be seen at 1.0822, a break higher could trigger a move towards 1.0842. On the downside, immediate support is seen at 1.0750, a break below could take the pair towards 1.0695.

Market activity remains subdued as market participants are hesitant to open new positions ahead of the US Federal Reserve's interest rate decision. The ECB will meet on Thursday. It is assumed that the regulator will also not change the parameters of monetary policy, but will indicate further maintaining the key interest rate at 4.50% for a long time. Today, investors will pay attention to the October statistics on industrial production in the eurozone: the indicator is expected to decline by 0.3% after -1.1% in the previous month, and in annual terms it may change from -6.9% to -4.6%.

During the week, a trading range formed with boundaries of 1.0723 and 1.0827. Now, the price has moved away from the upper limit and may continue to decline.

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Market Analysis: Powell's Speech Weakens USD

Yesterday, the Federal Reserve published a unanimous decision to leave the base rate unchanged for the third time in a row, which coincided with the expectations of most market participants. At the conference that followed, Powell's rhetoric was not as harsh as before. According to him:

→ economic activity is slowing, but the labor market remains strong;

→ inflation is still high, the Fed is committed to achieving the 2% target;

→ rates may rise if the US economy grows above expectations;

→ during discussions within the Fed, the topic of lowering rates becomes more relevant.

As a result, the increasingly clear prospect of rate cuts weakened the dollar greatly:

→ increased currency price relative to USD. The pound rose in price from the important support of 1.25, which we wrote about yesterday.

→ gold rose in price, again rising above the psychological level of $2,000 per ounce, as we expected in the analysis of December 5;

→ US stock indices rose in price.

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Natural Gas Prices Recover from 6-month Lows

Since November 1, the price of natural gas has fallen by more than 30%. This was facilitated by:
→ relatively mild weather at the beginning of the winter period;
→ record volumes of liquefied gas production, as reported by Reuters. Analysts estimate there is currently about 7.8% more gas in storage than normal for this time of year.

On December 13, the price of natural gas dropped below 2.20 for the first time since the beginning of June. This level may provide support given how price has interacted with it throughout 2023.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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GBP/USD, EUR/USD, USD/CAD Analysis: The Dollar Falls Sharply after the Fed Meeting

The American currency, having strengthened after the release of inflation data in the United States, fell sharply against almost all leading currencies yesterday. The reason for the sharp weakening of the dollar was most likely the updated median forecast of FOMC members for the dynamics of interest rates over the next few years, which does not assume a further increase in the base interest rate. As expected, the American regulator left the rate at the same level; in addition, several Fed members expect at least three rate cuts in 2024. On such news, the euro/dollar pair tested 1.0900, the pound/dollar pair consolidated above 1.2600, and the dollar/Canadian pair broke through support at 1.3500.

GBP/USD

The British currency, having tested 1.2500 after the announcement of the results of the Fed meeting, strengthened by more than 100 points in just a few hours. However, today, the situation may change dramatically. At 15:00 GMT+3, there will be a meeting of the Bank of England, at which, according to analysts, the rate will also remain at the same level. Moreover, if it turns out that less than three members of the Bank of England vote for a rate hike, the pair could return to recent lows at 1.2500.

On the daily GBP/USD chart, the price has consolidated above the alligator lines; the pair may rise above the upper fractal at 1.2720 and continue rising. Cancellation of the upward scenario can be considered if it consolidates below 1.2500.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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EUR/USD Resumes Rally While USD/CHF Drops To Support

EUR/USD started a fresh increase above the 1.0890 resistance. USD/CHF declined and now struggling below the 0.8700 resistance.

Important Takeaways for EUR/USD and USD/CHF Analysis Today

• The Euro rallied after it broke the 1.0890 resistance against the US Dollar.
• There is a connecting bullish trend line forming with support near 1.0955 on the hourly chart of EUR/USD at FXOpen.
• USD/CHF declined below the 0.8705 and 0.8665 support levels.
• There is a key bearish trend line forming with resistance near 0.8665 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase from the 1.0740 zone. The Euro cleared the 1.0830 resistance to move into a bullish zone against the US Dollar, as mentioned in the previous analysis.

The bulls pushed the pair above the 50-hour simple moving average and 1.0890. Finally, the pair tested the 1.1000 resistance. A high is formed near 1.1009 and the pair is now consolidating gains. Immediate support on the downside is near the 1.0955 level.

There is also a connecting bullish trend line forming with support near 1.0955. It is close to the 23.6% Fib retracement level of the upward wave from the 1.0777 swing low to the 1.1009 high.

The next major support is the 50% Fib retracement level of the upward wave from the 1.0777 swing low to the 1.1009 high at 1.0890. A downside break below the 1.0890 support could send the pair toward the 1.0820 level. Any more losses might send the pair into a bearish zone to 1.0740.

Immediate resistance on the EUR/USD chart is near the 1.1000 zone. The first major resistance is near the 1.1020 level. An upside break above the 1.1020 level might send the pair toward the 1.1065 resistance.

The next major resistance is near the 1.1080 level. Any more gains might open the doors for a move toward the 1.1150 level.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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EUR/USD: Price Is Again Testing Psychological Level of 1.10

An eventful news background creates increased volatility in financial markets.

Unlike the Fed, whose rhetoric is becoming softer, Europe's central banks are sticking to plans to maintain tight policies. The ECB said yesterday that policy easing was not even discussed at its two-day meeting, the Bank of England said rates would remain high for an "extended period," and Norway's central bank even raised rates.

This caused the pound and euro to rise sharply yesterday against a weakened USD.

However, today is the day of publication of PMI indices in Europe, which show that the economy in Europe is in a difficult situation, as the values are below = 50:
→ French Flash Manufacturing PMI: actual = 42.0, expected = 43.3, previously = 42.9;
→ German Flash Services PMI: actual = 48.4, expected = 49.1, previously = 49.6.

The publication of PMI values today led to a sharp depreciation of the euro against the dollar, thus a correction occurred after a rally of two days.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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USD/CAD Analysis: Rate Reaches Its Minimum in 4 Months

On Friday, the rate dropped below 1.366 for the first time since the beginning of August. This was facilitated by fundamental drivers:

→ The US dollar weakens after the Federal Reserve meeting, which signaled the possibility of lowering interest rates next year. Powell said monetary tightening is likely complete and discussions about cuts are "on the horizon."

→ On the contrary, the Bank of Canada remains more hawkish. In a speech on Friday, its chief Tiff Macklem said it was too early to consider cutting interest rates as inflation remained stubbornly above target.

Also, the weakening of the US dollar could have been influenced by disappointing news about Flash Manufacturing PMI values in the US: actual = 48.2, expectations = 49.5, a month earlier = 49.4.

We wrote about bearish signs on the chart back on December 1st.

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Interest Rate ETF Diversifies Trading Portfolio at Poignant Time

Electronic trading has never been so advanced. Recently, a wave of demand for diverse instruments has emerged among many traders, and in keeping with such a demand, FXOpen has added 19 new exchange traded funds (ETFs), which are tradable on the TickTrader platform as CFDs on an over-the-counter basis.

One of the 19 ETFs which have been launched by FXOpen is the Global X Interest Rate Hedge ETF, under the ticker symbol RATE.

This ETF is traded on the New York Stock Exchange (NYSE) via the NYSE's Arca system, which is the venue's electronic communication network (ECN) that is used for matching orders as opposed to the NYSE's physical and electronic stock exchange on which specific stocks of companies are traded.

The Global X Interest Rate Hedge ETF is an actively managed exchange-traded fund crafted to hedge against rising long-term interest rates. There has been a degree of volatility in the Global X Interest Rate Hedge ETF over recent weeks; therefore, its debut onto the market on the TickTrader platform is poignant.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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EUR/USD, GBP/USD, USD/JPY Analysis: Dollar Recovers as Rate Cuts Are Not Expected

The dollar rose on Friday after Fed spokesman Williams tempered expectations for a rate cut and reiterated that the central bank remains focused on bringing inflation down to its 2% target. Williams was the first Fed official to speak since a policy meeting last week in which the central bank left its benchmark overnight interest rate unchanged at a range of 5.25%-5.50%. With rates stable, the big shift in the Fed's outlook was due to the possibility of monetary easing next year. Economic data released Friday signalled a pick-up in US business activity but also showed the manufacturing sector continues to struggle.
EUR/USD

According to the EUR/USD technical analysis, the pair is consolidating around the 1.0900 level. Immediate resistance can be seen at 1.1023, and a break higher could trigger a rise towards 1.1065. On the downside, immediate support is seen at 1.0896, a break below could take the pair towards 1.0855.

The euro weakened against the dollar on Friday after the euro zone's contraction in business activity unexpectedly deepened in December. The eurozone's preliminary HCOB manufacturing PMI remained stable at 44.2, missing market expectations of 44.6. Although eurozone manufacturing indicators remained stable, they fell below expected levels. Business activity in Germany, Europe's largest economy, contracted in December, raising concerns about the increased likelihood of a recession by the end of the year. In France, the decline accelerated faster than expected, driven by further deterioration in demand for goods and services in the eurozone's second-largest economy.

The previous ascending channel remains. Now, the price has moved away from the lower boundary and may continue to rise.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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USD/JPY and NIKKEI React to Bank of Japan Decision

This morning, the Bank of Japan decided to leave interest rates unchanged at -0.10%. Its head, Kazuo Ueda, stated that:
→ the chances that the current ultra-loose monetary policy will change in January are very small;
→ further decisions of the Bank of Japan will be based on incoming economic information.

Thus, rumors that the Bank of Japan might raise rates from the negative zone did not come true. As a result, the NIKKEI index rose to November highs, and the yen weakened.

The 4 hour USD/JPY chart shows that:
→ The price forms a downward channel (shown in red). The strengthening of the yen against the US dollar, observed since November, was caused by both rumors related to the Bank of Japan and the prospect of a rate cut by the Federal Reserve.
→ The lower border of the channel pushed the price upward on December 7, indicating support at 141.65.

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GBP/USD, EUR/USD, and USD/JPY Analysis: Yen and European Currencies Retreat from Recent Highs

The sharp decline in the US currency that we observed after the Fed meeting slowed down slightly towards the end of last week. Thus, the pound/US dollar currency pair rebounded from 1.2700, the euro/US dollar pair is consolidating after testing 1.1000, and buyers of the US dollar/yen pair found support just below 141.00.

GBP/USD

The pound/dollar currency pair failed to strengthen above 1.2750 and rebounded to 1.2600. At the moment, the pair is consolidating in a narrow range, which most likely requires a good fundamental impulse to exit. Today at 14:00 GMT+3, data on the index of industrial orders in the UK for December will be published. Also, at 16:00 GMT+3, it is worth paying attention to the speech of Sarah Breeden, a member of the Financial Policy Committee of the Bank of England. Tomorrow, the UK's core consumer price index for November is scheduled to be published.

On the GBP/USD charts with higher time frames, the price confidently stays above the alligator lines. If the price breaks above the upper fractal at 1.2790, the price rise may happen. We may consider a breakdown of the upward scenario after the price confidently consolidates below 1.2500.

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Bank of England Maintains Interest Rates at 5.25% Amidst Global Economic Dynamics

In a move that marks the third consecutive instance, the Bank of England has opted to maintain its benchmark interest rates at 5.25% on the 14th of December. While this decision deviates from the recent trend of relentless interest rate increases, it falls short of a rate cut, emphasising the central bank's cautious approach to monetary policy.

The Bank of England's choice to hold interest rates steady comes as a nuanced response to the prevailing economic climate. In a departure from the trajectory of continuous rate hikes that have characterised the central bank's policy during the course of 2022 and early 2023, the decision to maintain the status quo hints at maintaining conservatism and continuing to aim for the target 2% inflation for 2024.
Echoes of the Federal Reserve's Conservative Measures

In parallel to the current stance of the United States Federal Reserve, the Bank of England is embracing highly conservative measures by keeping borrowing rates relatively high. Despite the inflation rate in the UK being significantly lower than its double-figure peak over a year and a half ago at the onset of this policy, the central bank remains steadfast in its commitment to a conservative monetary approach.

MPC's Forward Guidance

The Bank of England's Monetary Policy Committee (MPC) justifies its decision by emphasising the need for continued restrictive borrowing conditions. While the inflation rate has experienced a substantial decline from its earlier peaks, the MPC asserts that the current inflation level remains above the target of 2% set for 2024. This forward guidance underscores the Bank of England's commitment to carefully navigating the delicate balance between economic growth and inflation control.

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AMZN: Stock Price Ends Year Stronger Than S&P 500

Amazon shares are up approximately 79% year to date in 2023, outperforming the S&P 500. This reflects the company's strong fundamentals:

→ Amazon's third-quarter results beat Wall Street estimates, helped by growth in its cloud and advertising businesses. According to Barchart, analysts are forecasting AMZN's earnings growth of 35% in fiscal 2024, as well as revenue growth of 11%.

→ Positive forecasts are associated with the activation of retail trade. In the past three months alone, the SPDR S&P Retail ETF has gained 16.4%, significantly outpacing the S&P 500's 6.8% gain over the same period, according to FactSet data. Therefore, AMZN could benefit significantly from the holiday shopping season.

→ Analysts are praising the prospects of the Prime platform, which will soon broadcast games involving 40 major league teams in baseball, basketball and hockey.

The chart shows that the AMZN stock price is moving steadily within the ascending channel (shown in blue). Wherein:

→ the price quickly rebounded from its lower border at the end of October - a sign of strong demand;
→ the price is able to stay in the upper half of the channel, using its median line as support and forming rising lows in December;
→ at the beginning of the new week, the price exceeded the psychological level of USD 150, setting a high of the year.

Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Market Analysis: Gold Price Eyes Breakout, Crude Oil Price Recovers

Gold price gained traction and climbed above the $2,030 resistance level. Crude oil price is recovering, and it could climb further higher toward the $78 resistance.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price started a decent increase from the $1,975 zone against the US Dollar.
• A connecting bullish trend line is forming with support near $2,030 on the hourly chart of gold at FXOpen.
• Crude oil prices rallied above the $71.00 and $73.00 resistance levels.
• There is a key bullish trend line forming with support near $73.00 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $1,975 zone. The price formed a base and started a fresh increase above the $1,990 level.

There was a decent move above the 50-hour simple moving average. The bulls pushed the price above the $2,030 resistance zone. Finally, the bears appeared near $2,045, A high is formed near $2,046.99 and the price is now consolidating gains.

There was a minor move below the 23.6% Fib retracement level of the upward move from the $2,015 swing low to the $2,046 high. The RSI is still stable above 50 and the price could aim for more gains. Immediate resistance is near the $2,045 level.

The next major resistance is near the $2,050 level. An upside break above the $2,050 resistance could send Gold price toward $2,065. Any more gains may perhaps set the pace for an increase toward the $2,080 level.

Initial support on the downside is near the 50-hour simple moving average or $2,030. There is also a connecting bullish trend line forming with support near $2,030. The trend line is close to the 61.8% Fib retracement level of the upward move from the $2,015 swing low to the $2,046 high.

If there is a downside break below the $2,030 support, the price might decline further. In the stated case, the price might drop toward the $2,008 support.



Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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EURUSD Pair May Rise Despite Bank Predictions of Bearish Trend

During the middle of 2023, the EURUSD pair witnessed a steady decline that lasted until October, reflecting a prolonged period of challenges for the euro against the US dollar. Since then, there has been a glimmer of hope in the market. Despite the recent correction, the market has hinted at a potential continuation of the uptrend over the past five days.

Over the weekend, the EURUSD pair, which had slumbered at the high of 1.0890, experienced a notable rise to 1.10 by Tuesday midway through the London trading session. As the new week began, the euro maintained its upward trajectory, standing at 1.10 as trading commenced this morning. While some analysts cautiously labelled this movement as a 'rally,' it is evident that there has been a discernible shift in sentiment for the EURUSD pair.

HSBC's Bearish Prediction

Adding an interesting layer to the unfolding narrative, Tier 1 interbank FX dealer HSBC has released its predictions for the most traded currencies in 2024. The bank's outlook for the EURUSD pair is notably bearish, projecting a trading level of around 1.02 by the end of 2024. While such predictions are speculative and subject to change, they introduce an element of anticipation for traders and investors navigating the currency markets.

It's essential to note that HSBC's forecast raises echoes of the latter part of 2022 when the EURUSD pair experienced a significant decline, breaching parity and reaching 0.97 by the end of September, reaching 0.9535 at one point on September 29. Whether a similar scenario will unfold in 2024 remains uncertain, with the consensus around central bank monetary policy playing a pivotal role.

Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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S&P 500: Worst Day since September

The S&P 500 fell 70.02 points, or 1.47%, to 4,698.35 yesterday, according to Dow Jones Newswires. This is the largest one-day point decline since Thursday, September 21, 2023.

Of the 500 stocks in the index, only 19 closed in the green. Of these, Google shares, as the company announced plans to reorganize its advertising department, which employs 30 thousand people.

From a fundamental perspective, there were no obvious triggers that carried enough weight to cause the sharp decline. Moreover, the Consumer Confidence indicator was published yesterday, which showed that consumer confidence has increased the most since the beginning of 2021.

From the point of view of behavioral psychology and technical analysis, the sharp decline has reasonable explanations:

→ from the low of late October to the beginning of yesterday's session, the S&P 500 index grew by 16%. This is an impressive rally, fueled by expectations of easing inflation and interest rate cuts in 2024. A significant correction is a logical development of events.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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USD/CAD, AUD/USD, EUR/USD Analysis: Commodity Currencies Testing Important Marks

The penultimate five-day trading period of the past year turned out to be quite successful for commodity currencies. Thus, the AUD/USD pair is approaching the July extremes of this year, the USD/CAD pair has broken through the support at 1.3400, and the NZD/USD pair has confidently strengthened above 62. At the same time, European currencies failed to move above strategic levels and are slightly adjusted against the dollar.

USD/CAD

The USD/CAD currency pair lost more than 200 pips last week and strengthened below the alligator lines on higher time frames. The likelihood of a change in the vector of monetary policy by the American Federal Reserve is contributing to the strengthening of the downward trend in the pair. Yesterday, data on the US consumer confidence index for December was published, showing positive dynamics: 110.7 versus 103.8. This fundamental impulse allowed the pair’s buyers to find support at 1.3310 and rebound to 1.3370, but so far no upward dynamics have been observed.

Today at 16:30 GMT+3, it is worth paying attention to the publication of US GDP data for the third quarter. Also, at this time, the core Canadian retail sales index for October will be published. In addition to the data already mentioned, weekly figures on the number of applications for unemployment benefits in the United States will be released.

On the daily and weekly USD/CAD charts, the price is below the alligator lines, the AO and AC oscillators are red, which additionally indicates sales. The downward scenario may be cancelled if the price confidently consolidates above 1.3460-1.3500.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Market Analysis: GBP/USD Aims Fresh Increase While EUR/GBP Rallies

GBP/USD is attempting a fresh increase from the 1.2610 zone. EUR/GBP is gaining pace and might extend its rally above the 0.8700 zone.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is trading in a bullish zone above 1.2600 against the US Dollar.
• There was a break above a key bearish trend line with resistance at 1.2640 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP started a fresh increase above the 0.8620 resistance zone.
• There is a major bullish trend line forming with support near 0.8640 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a downside correction from the 1.2760 zone. The British Pound traded below the 1.2700 zone against the US Dollar.

A low was formed near 1.2611 and the pair is now attempting a fresh increase. There was a break above the 23.6% Fib retracement level of the downward move from the 1.2761 swing high to the 1.2611 low. Besides, there was a break above a key bearish trend line with resistance at 1.2640.

The pair is now trading above the 50-hour simple moving average and 1.2680. On the upside, the GBP/USD chart indicates that the pair is facing resistance near the 50% Fib retracement level of the downward move from the 1.2761 swing high to the 1.2611 low at 1.2685.

The next major resistance is near the 1.2705 level. If the RSI moves above 60 and the pair climbs above 1.2705, there could be another rally. In the stated case, the pair could rise toward the 1.2760 level or even 1.2790.

On the downside, there is a major support forming near 1.2600. If there is a downside break below the 1.2630 support, the pair could accelerate lower. The next major support is near the 1.2610 zone, below which the pair could test 1.2550. Any more losses could lead the pair toward the 1.2500 support.

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