In the European trade, the GBP / USD pair is located above the SMA of 21 and above 2/8 of murray, showing a bullish signal, after having broken the trend line of the bearish channel in a 4-hour chart.
The British pound is optimistic during this week. After breaking its downward channel that limits the upward movement, yesterday it remained within a range due to the bank holiday in the United States. The currency pair could continue its consolidation. The next resistance is seen in the area of 4/8 of murray located at 1.3916.
On the other hand, in the United Kingdom, Boris Johnson announced that all restrictive measures would be lifted on July 19, including the use of masks and social distancing rules. Such reopnening of the economy could take the British pound to the area of the EMA of 200 (1.4038) which is located in the same place the 6/8 of murray area of the psychological level of 1.40.
The short-term technical outlook for GBP / USD remains bullish as long as the price is holding above the 21 SMA. Now it is located at 1.3805 and above the 2/8 located at 1.3793. Together these levels act as very strong support and will prop up the bullish outlook.
If the GBP / USD pair breaks the resistance zone of 1.3916 (4/8), which is a key level, a strong bullish momentum could occur to the 1.4038 zone, as the 4/8 of murray on previous occasions has kept the British pound under downward pressure.
The technical reading of the eagle indicator is showing a sign of a probable upward movement, as the moving average is in the positive zone and has a way to go to the overbought level.
Our recommendation is to buy above the bearish channel and above the 21 SMA with targets at 1.3916 (4/8) and 1.4038 (6/8).
Support and Resistance Levels for July 06 - 07, 2021
Resistance (3) 1.3952
Resistance (2) 1.3904
Resistance (1) 1.3882
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Support (1) 1.3837
Support (2) 1.3792
Support (3) 1.3769
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Trading tip for GBP/USD for July 06 - 07, 2021
Buy if rebound SMA of 21 at 1.3805 , with take profit at 1.3916(4/8) and 1.4038 (6/8), stop loss below 1.3765.
Buy above 1.3855, with take profit at 1.3916 (4/8) and 1.4038 (6/8), stop loss below 1.3805.
