GBP/USD Holding Gains Above 1.3600, EUR/USD Struggles

Key Highlights

  • GBP/USD traded as high as 1.3745 before starting a downside correction.

  • A major bullish trend line is forming with support near 1.3600 on the 4-hours chart.

  • EUR/USD is still struggling to clear the 1.2200 resistance zone.

  • The UK Claimant Count could change 35K in Dec 2020, less than the last 64.3K.

GBP/USD Technical Analysis

After a minor drop, the British Pound climbed back above 1.3600 against the US Dollar. GBP/USD even surpassed the 1.3700 resistance zone before it started a downside correction.

Looking at the 4-hours chart, the pair traded as high as 1.3745 and recently corrected below 1.3680. There was a test of the 50% Fib retracement level of the upward move from the 1.3519 swings low to 1.3745 high.

On the downside, there are many major supports forming near 1.3600 and the 100 simple moving average (red, 4-hours). There is also a major bullish trend line forming with support near 1.3600 on the same chart.

The trend line is close to the 61.8% Fib retracement level of the upward move from the 1.3519 swings low to 1.3745 high. Any more losses could lead the pair back towards the 1.3520 zones and the 200 simple moving average (green, 4-hours).

On the upside, the pair is facing resistance near the 1.3740 and 1.3750 levels. A successful break above the 1.3750 resistance could open the doors for a steady increase towards the 1.3800 and 1.3820 levels.

Looking at EUR/USD, the pair struggled to continue higher above the 1.2200 resistance zone. Conversely, the gold price is recovering and it could attempt to clear the $1,880 resistance level.

Economic Releases

  • UK Claimant Count Change Dec 2020 – Forecast 35K, versus 64.3K previous.

  • UK ILO Unemployment Rate Nov 2020 (3M) – Forecast 5.1%, versus 4.9% previous.

  • US Housing Price Index Nov 2020 (MoM) – Forecast +1.2%, versus +1.5% previous.

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