Technical Analysis of GBPUSD on the 4-hour timeframe: 18/07/2023

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Political and security tensions between China and Japan have once again reached a peak. Recent remarks by Sanae Takaichi regarding Japan’s potential response to a Chinese attack on Taiwan have ignited a new wave of disputes—tensions that neither Donald Trump’s repeated calls with Xi Jinping and Takaichi nor diplomatic outreach have been able to contain. In this article, we take an analytical look at the dimensions of the crisis and its possible consequences.

The GBPUSD currency pair initiated an upward trend surpassing the resistance level at 1.2850, and subsequently crossed the 1.3000 level.

Upon examining the 4-hour chart, you will find that this currency pair is positioned above the 200-period Simple Moving Average (green, 4 hours) and the 100-period Simple Moving Average (red, 4 hours) above the 1.3000 level.

After recently touching the 1.3140 level, it has started a partial corrective decline. The immediate support level is around 1.3020, and the next significant support is seen near the levels of 1.2950 and 1.2940.

The next significant support is at 1.2880, breaking below, which may lead to a decline towards 1.2800 or the 100-period Simple Moving Average (red, 4 hours).

Any further losses could drive the currency pair toward the support area of 1.2720.

On the upside, a resistance level near 1.3120 is drawn, and the next significant resistance is close to 1.3140. If a move is above the resistance level of 1.3140, this currency pair can rise toward 1.3250. Any further increase may temporarily push the currency pair toward the resistance zone at 1.3400.