British Pound Recovers against the Dollar

The British pound (GBP) is trading above 1.3077 on the above one hour MT 4 chart against the U.S. dollar (USD). On Monday the benchmark GBP/USD currency exchange rate hit a one week low price point but the descending triangle trend line in play since 17 August held. This Forex market then recovered.

The economic calendar, for the week, is starting to pick up. The United Kingdom will publish monthly CBI realized sales data. The world’s largest economy, the United States, will see some high impact events today.

This includes the monthly CB consumer confidence gauge, the Richmond Fed manufacturing index, monthly house price index (HPI) data and monthly new home sales. Data from both the U.K. and U.S. will affect price volatility for both the British pound and U.S. dollar.

Germany is publishing their final gross domestic product (GDP) data. The private Ifo economic institute will release their monthly German business climate gauge.

Daily British Pound Technical Analysis (GBP/USD)

Looking at price action on the above hourly chart, the recovery with the British pound was also supported by an improvement with the relative strength index (RSI). With that said, the first upside barrier comes into play at a falling trend line, in play since last Friday. This layer of technical resistance lines up at 1.3105. A daily close above this level brings the 100 hour exponential moving average (EMA) into play.

This upside barrier lines up at 1.3125. The next layer of technical resistance then lines up at 1.3150. The next layer of technical resistance comes into play at the key level of 1.32. A sustained close here would bring Friday’s high price point in play at 1.3255 as the next layer of technical resistance. The monthly high price point at 1.3270 could then come under pressure.

On the flip side, the first downside barrier lines up at 1.3050. The key psychological barrier lining up at 1.30 would then come into focus. Below 1.30, the next layer of technical support lines up at 1.2980.