In the American pre-market, the GBP / USD pair is trading above the 21 SMA and below the 200 EMA and 8/8 Murray. The price is moving within a downtrend channel, however showing bullish strength supported by the indicator eagle.
The pair has been bouncing within the 1.4099 -1.4222 range zone. The price has been trapped sideways for several days.
The British pound has remained supported by the optimistic outlook for the UK's economic recovery from the pandemic amid gradual easing of lockdown measures. The British government is ready to go ahead with its plan to completely end the restrictions from June 21.
Bank of England lawmaker Gertjan Vlieghe indicated last week that the central bank is likely to raise interest rates if the economy recovers faster than expected. This could give GBP / USD bullish strength, breaking the 1.43 level and reaching the 1.47 level of strong resistance.
On the other hand, the USDX, is also in the zone of lows and very oversold. So, strength of the US dollar could prevent the bulls from opening aggressive positions and capping the gains of the currency pair. GBP/USD could fall to the 1.3670 area, strong monthly support.
In the 1-hour chart, we can see the resistance zone of 1.4186. At this level there could be resistance as the bearish channel line converges there. If the upward force of GBP / USD takes it to this level, we should expect a consolidation to sell around this area.
Conversely, a bullish bounce in the zone of the SMA 21 around 7/8 Murray will be a good opportunity to buy with targets at 1.4160 and 1.4222. The eagle indicator is showing bullish signs.
Support and Resistance Levels for May 19 – 20, 2021
Resistance (3) 1.4288
Resistance (2) 1.4240
Resistance (1) 1.4171
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Support (1) 1.4112
Support (2) 1.4078
Support (3) 1.4055
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Trading tip for GBP/USD for June 04 - 07, 2021
Sell if pullback 1.4186 (Strong resistance), with take profit at 1.4140 and 1.4099 (7/8), stop loss above 1.4222.
