GBP/USD Could Resume Decline, UK Employment Report Next

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Key Highlights

• GBP/USD is still struggling to clear the 1.3600 resistance zone.
• It traded below a crucial bullish trend line with support near 1.3550 on the 4-hours chart.
• EUR/USD is showing a few bearish signs below 1.1350.
• The UK ILO Unemployment rate could remain at 4.1% in Dec 2021 (3M).

GBP/USD Technical Analysis

The British Pound failed to gain strength above 1.3640 against the US Dollar. GBP/USD started a downside correction after trading as high as 1.3643.

Looking at the 4-hours chart, the pair started a downside correction below the 1.3600 level. The pair moved below the 38.2% Fib retracement level of the upward move from the 1.3357 swing low to 1.3643 high.

Besides, there was a break below a crucial bullish trend line with support near 1.3550 on the same chart. It tested the 50% Fib retracement level of the upward move from the 1.3357 swing low to 1.3643 high.

If the bears remain in action, the pair could decline towards the 1.3450 level. The next major support is near the 1.3400 level. On the upside, the pair might face sellers near the 1.3580 level. The main breakout resistance is still near the 1.3600 and 1.3620 levels.

A clear move above the 1.3620 level could open the doors for more gains. In the stated case, GBP/USD might rise towards the 1.3720 level.

Looking at EUR/USD, the pair is showing a few bearish signs below 1.1350. The next major support sits near the 1.1265 level.

Economic Releases

• UK Claimant Count Change for Jan 2022 – Forecast -10.0K, versus -43.3K previous.
• UK ILO Unemployment Rate for Dec 2021 (3M) – Forecast 4.1%, versus 4.1% previous.
• Euro Zone Gross Domestic Product for Q4 2021 (QoQ) (Prelim) – Forecast 0.3%, versus 0.3% previous.
• Euro Zone Gross Domestic Product for Q4 2021 (YoY) (Prelim) – Forecast 4.6%, versus 4.6% previous.
• German ZEW Business Economic Sentiment Index for Feb 2022 – Forecast 53.5, versus 51.7 previous.