GBP/USD Corrects, US Dollar Regains Strength

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Key Highlights

• GBP/USD started a fresh decline from the 1.1500 resistance zone.
• It traded below a key bullish trend line with support at 1.1175 on the 4-hours chart.
• EUR/USD, AUD/USD, and NZD/USD faced an increase in selling pressure.
• The UK Claimant count could change -11.4K in Sep 2022.

GBP/USD Technical Analysis

The British Pound struggled to clear the 1.1500 resistance zone against the US Dollar. GBP/USD formed a short-term top and started a fresh decline below the 1.1400 level.

Looking at the 4-hours chart, the pair declined below the 1.1350 and 1.1300 levels. There was a clear move below a key bullish trend line with support at 1.1175. The pair declined below the 23.6% Fib retracement level of the upward move from the 1.0335 swing low to 1.1495 high.

The pair settled below the 1.1200 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

On the downside, an initial support is near the 1.0950 level. The main support sits at the 1.0915 level. It is close to the 50% Fib retracement level of the upward move from the 1.0335 swing low to 1.1495 high.

A downside break below the 1.0915 zone might send the pair towards the 1.0800 level. If the pair stays above the 1.0915 support, it could start a fresh increase. An immediate resistance is near the 1.1175 level.

The next major resistance is near the 1.1250 level. A clear move above the 1.1250 level might send the pair towards the 1.1320 level. The next major hurdle could be near the 1.1500 level.

Looking at EUR/USD, the pair started a fresh decline after it failed to clear the 1.0000 level. If the bears remain in action, the pair might slide below 0.9650.

Economic Releases

• UK Claimant Count Change for Sep 2022 – Forecast -11.4K, versus 6.3K previous.
• UK ILO Unemployment Rate for August 2022 (3M) – Forecast 3.6%, versus 3.6% previous.