The GBP/USD pair is trading within a downtrend channel. This trend started on July 30. Technical indicators show that it is reaching a support level, with a probability of a technical rebound or trend change in the coming days.
On the 4H chart, it is trading below the 21 SMA and 200 EMA with a slight bearish force. The bearish pressure could have a stop at the line of 2/8 Murray support.
The 2/8 Murray level located at 1.3793 has been tested by the British pound on August 12. From this level, it has made a bounce of almost 100 pips. If it approaches this support level again there could be bullish momentum and the pound sterling could rise and break the top of the bearish channel.
A slip below the 2/8 Murray support line, although there is a probability of support in the 1.3770 zones. There is the lower line of the bearish channel. This level could give a good technical rebound where we could buy with targets towards the EMA of 200 and 4/8 of Murray.
On the contrary, for the British pound to break out of the downward trend, it should trade above 1.3830. There is the EMA of 200. This is the key level that we must monitor. Above this level, there is a probability of a break of the upper line of the bearish channel, around the zone of 1.3850.
With the sharp break of the top of the bearish channel and consolidation above 1.3850, the pound sterling could quickly climb to the strong resistance of 4/8 of murray located at 1.3916.
Market sentiment for the British pound shows that investors are cautious due to the increase in new cases of covid-19. A month after removing all restrictions imposed by the pandemic, the British have yet to return to full activity, as fears of the virus keep the pair under pressure.
Support and Resistance Levels for August 17 - 18, 2021
Resistance (3) 1.3920
Resistance (2) 1.3870
Resistance (1) 1.3848
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Support (1) 1.3798
Support (2) 1.3769
Support (3) 1.3745
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Trading tip for GBP/USD for August 17 - 18, 2021
Buy if rebound 1.3793 (2/8), with take profit at 1.3830 (EMA 200 and 1.3916 (4/8), stop loss below 1.3760.
Buy if rebound 1.3770 (bearish channel), with take profit at 1.3830 (EMA 200 and 1.3916 (4/8), stop loss below 1.3735.
