GBP/USD declined heavily and broke many key supports near the 1.2200 and 1.2000 levels. GBP/JPY is currently recovering, but it is likely to face sellers near 131.30.
Important Takeaways for GBP/USD and GBP/JPY
- The British Pound is trading in a bearish zone well below the 1.1800 level.
- There is a key contracting triangle forming with resistance near 1.1830 on the hourly chart of GBP/USD.
- GBP/JPY is currently trading above the 127.80 support level, with a positive bias.
- There is a major contracting triangle forming with resistance near 131.80 on the hourly chart.
GBP/USD Technical Analysis
This past week, the British Pound started a major decline from well above the 1.2200 support against the US Dollar. The GBP/USD pair broke a few important supports near 1.2000 to move into a negative zone.
Moreover, the pair traded below the 1.1800 support area and settled well below the 50 hourly simple moving average. Finally, it traded close to the 1.1400 level a new 2020 low is formed near the 1.1415 zone on FXOpen.
The pair is currently correcting higher above the 1.1550 level. It broke the 23.6% Fib retracement level of the recent decline from the 1.1933 high to 1.1531 swing low.
On the upside, an initial resistance is seen near the 1.1735 level. It is close to the 50% Fib retracement level of the recent decline from the 1.1933 high to 1.1531 swing low. Besides, there is a key contracting triangle forming with resistance near 1.1830 on the hourly chart of GBP/USD.
Therefore, the pair is likely to face a strong selling interest near the 1.1780 and 1.1800 resistance levels. To move into a positive zone, the pair needs to gain strength above 1.1735 and then clear the 1.1830 resistance area.
Conversely, it could continue to move down below the 1.1620 level. An initial support is near the 1.1600 level, below which the bears are likely to aim 1.1520 or 1.1500.
GBP/JPY Technical Analysis
The British Pound declined sharply below 130.00 before the bulls appeared near 123.60 against the Japanese Yen. The GBP/JPY pair started a decent recovery wave and climbed above the 125.00 and 126.00 resistance levels.
The pair surged towards the 132.00 level, where it faced sellers. As a result, there was a fresh decline and the pair traded below the 23.6% Fib retracement level of the upward move from the 123.62 low to 132.02 high.
However, the pair remained well bid above the 127.80 support level and the 50 hourly simple moving average. The 50% Fib retracement level of the upward move from the 123.62 low to 132.02 high is also acting as a support.
At the moment, there is a major contracting triangle forming with resistance near 131.80 on the hourly chart. On the upside, there are many hurdles, starting with 130.00 and up to 132.00.
To start a strong uptrend towards 135.00 and 136.00, the bulls need to push GBP/JPY above the 132.00 resistance area. If the pair fails to continue higher, it could decline below the 127.80 support.
The next support for the bulls is near the 126.85 level, below which the bears are likely to aim a test of the 125.00 support level in the near term.