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Can GBP/USD Recover Higher?

December 7, 2021

 

  • GBP/USD has struggled to recover above 1.3350.
  • Bearish trend line has formed resistance near 1.3280.

The British Pound, US Dollar pair tested resistance near 1.3350. GBP/USD struggled to gain momentum before dropping below the 1.3300 support level.

GBP/USD 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, the pair dropped to as low as 1.3200 before consolidating near 1.3280, well below the 100-MA (red) and 200-MA (blue).

For the pair to turn bullish, the quote will first need to test resistance near 1.3270. There is also a major bearish trend line forming resistance near 1.3280. This line is also close to the 23.6% Fibonacci retracement level of the downward move from the swing high of 1.3513 to the swing low of 1.3194. Above this, there is further resistance near 1.3350 and the 50% Fib retracement level (of the 1.3513 high to the 1.3194 low). A clear break above the 1.3300 and 1.3350 levels could trigger a decent recovery towards the 1.3600 level.

In contrast, if the pair continues bearish, the quote will next test the 1.3200 and 1.3180 support levels. A break below these levels could see the quote gain momentum, dropping down as far as 1.3050, a level last seen in November 2020.

 

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