GBP/USD Could Nosedive If It Breaks 1.3800

Key Highlights

  • GBP/USD failed on more than two occasions to clear the 1.4000 resistance.
  • A major bearish trend line is forming with resistance near 1.3930 on the 4-hours chart.
  • EUR/USD is facing an uphill task near 1.2000, while gold price is consolidating below $ 1,750.
  • The UK unemployment rate is likely to rise from 5.1% to 5.2% in Jan 2020 (3M).

GBP/USD Technical Analysis

In the past few days, the British Pound failed to clear the 1.4000 resistance on a few occasions against the US Dollar. GBP/USD started a fresh decline below the 1.3900 level.

Looking at the 4-hours chart, the pair topped near 1.4001 before a fresh decline. It settled below 1.3900, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

On the downside, the pair is holding a major support near 1.3800. If there is a downside break below 1.3800, there is a risk of a sharp decline towards 1.3720 or even 1.3650.

On the upside, the pair is facing resistance near 1.3900. There is also a major bearish trend line forming with resistance near 1.3930 on the same chart. The main resistance is still near the 1.4000 level. A successful close above the 1.4000 level could open the doors for a steady increase in the coming sessions.

Similarly, EUR/USD must settle above 1.1990 and 1.2000 for a fresh increase. Looking at other major pairs, AUD/USD and NZD/USD seem to be consolidating above major supports.

Economic Releases

  • US New Home Sales for Feb 2021 (MoM) – Forecast -6.5% versus +4.3% previous.
  • UK Claimant Count Change for Feb 2020 – Forecast -12.2K, versus -20.0K previous.
  • UK ILO Unemployment Rate for Jan 2020 (3M) – Forecast 5.2%, versus 5.1% previous.