The GBP/USD pair faced resistance near the 1.3250 level against the US Dollar and initiated a downside correction below 1.3200. This correction came after struggling near the 1.3260 mark, indicating a short-term top formation for the British Pound.
Technical Analysis:
Analyzing the 4-hour chart of GBP/USD, we can see that the pair traded below the 23.6% Fibonacci retracement level of the upward move from the swing low of 1.2664 to the high of 1.3266. Additionally, it broke below a key bullish trend line with support at 1.3140.
While the pair managed to stay above the 200 simple moving average (green, 4-hour), it fell below the 100 simple moving average (red, 4-hour) and the 1.3100 level. Immediate support now lies near 1.3035, followed by the 200 simple moving average at 1.2965. A breach below this level could signal a larger decline, with the next major support at 1.2800.
On the upside, resistance is likely near 1.3140, with a significant hurdle at 1.3180. A clear break above 1.3180 could pave the way for a move towards the 1.3250 zone, potentially testing the 1.3350 level.
EUR/USD Outlook:
In the EUR/USD pair, there has been a struggle to initiate a fresh increase above 1.1100. This could lead to an extended downside correction for the Euro against the US Dollar.
Economic Events:
Looking ahead, the UK Claimant Count Change for August 2024 is forecasted at 95.5K, compared to the previous figure of 135K. Additionally, the UK ILO Unemployment Rate for July 2024 (3M) is expected to be 4.1%, down from the previous 4.2%.
Subheadings:
UK Employment Report Preview
GBP/USD Technical Analysis
EUR/USD Analysis and Outlook
UK Employment Report Preview:
The upcoming UK employment report is critical for the Pound as it provides insights into the labor market’s health. The Claimant Count Change, which measures the number of people claiming unemployment benefits, is expected to show a decrease of 95.5K in August 2024. A lower than expected figure could be positive for the Pound, indicating a stronger job market.
On the other hand, the ILO Unemployment Rate for July 2024 is forecasted to be 4.1%, slightly lower than the previous 4.2%. A decline in the unemployment rate could signal a recovering economy, supporting the Pound against the Dollar.
GBP/USD Technical Analysis:
The technical analysis of GBP/USD suggests a bearish outlook in the short term. The pair’s failure to break above 1.3260 and subsequent downside correction indicate a potential reversal from recent highs.
The breach of the key bullish trend line and the 1.3100 level signal increased selling pressure. However, the pair has managed to hold above the 200 simple moving average, indicating some support at lower levels.
In the event of a further decline, the next support levels to watch are at 1.3035 and 1.2965, where the 200 simple moving average lies. A break below these levels could open the door for a more significant downside move towards 1.2800.
On the upside, resistance is seen near 1.3140 and 1.3180. A clear break above 1.3180 could shift the momentum back in favor of the Pound, with a potential retest of the 1.3250 zone.
EUR/USD Analysis and Outlook:
The EUR/USD pair is struggling to gain momentum above the 1.1100 level, indicating a potential downside bias. The failure to break above this key resistance level could lead to a continuation of the recent correction.
With the Dollar regaining strength, the Euro might face further selling pressure in the near term. A break below key support levels could trigger a deeper pullback towards lower levels.
Investors will closely monitor economic data releases and central bank statements for clues on the future direction of the currency pair. Any developments in monetary policy or economic indicators could significantly impact the EUR/USD exchange rate.
In conclusion, the GBP/USD pair is facing a pullback ahead of the UK employment report, while the EUR/USD pair struggles to gain traction above key resistance levels. Traders should closely monitor technical levels and economic events for potential trading opportunities in the forex market.
