The GBP / USD pair, at the opening of the American session in 4-hour charts, is trading above the strong support of 5/8 of Murray and above the SMA of 21, we can also notice a formation of a bullish pennant.
The British pound has been supported by the expectations of the UK government's plan to end the lockdown restrictions by June 21, it would lead to a rapid economic recovery, this gave strong momentum to the pair.
However the GBP / USD pair has failed to stay above the psychological level of 1.4000 which suggests that the positive news is already fully discounted in price.
Therefore, any attempt to move higher has the risk of fading quite quickly, as the bullish force of the US Dollar (USDX) is keeping downward pressure on all its crosses.
At technical level, the GBP / USD pair is trading within the downtrend channel, due to the formation of the pennant, a break above 1.3965 will be a good signal to buy with targets at the 1.4160 level of 6/8 murray.
On the contrary, a break below the strong support at 1.3916, will give us the opportunity to sell with targets at the 200 EMA located at 1.3802.
The eagle indicator is in the zone and is oversold and an imminent upward movement is likely in the next few days.
Support And Resistance Levels For March 04 - 05, 2021
Resistance (1) 1.4013
Resistance (2) 1.4044
Resistance (3) 1.4083
Support (1) 1.3906
Support (2) 1.3873
Support (3) 1.3826
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Trading tip for GBP/USD for March 04 - 05, 2021
Buy above 1.3965 (SMA 21) with take profit at 1.4030 and 1.4160, stop loss below 1.3816.
Sell if breaks 1.3900 (5/8 of murray) with take profit at 1.3902 (EMA 200), stop loss above 1.3940.
