The 4-hour chart of the GBP / USD pair is showing a clearly bearish bias. At this moment, the currency pair is trading at 1.3471 reaching the lows of January 11. There is no sign of recovery, but the price is approaching strong weekly support located at 1.3448. Below there is -2/8 of murray at 1.3427 which represents extremely oversold market and an imminent technical rebound.
After breaking the symmetrical triangle on September 28, the pound fell sharply below the SMA of 21 and extends its fall so far. The technical indicators are showing signs of exhaustion and the pair could reach a support level around 1.3427 and 1.3448. We believe this scenario could stop the fall of the pound and the pair could start a consolidation that will be followed by a correction or technical bounce.
One factor that is weakening the GBP / USD pair is supply problems in the United Kingdom. The British army is delivering gasoline to gas stations. This is generating panic as it is reported that there are long lines to fill as much fuel as possible. Transportation problems could derail the economy and the pound could fall to the 1.30 level in the medium term.
As a result, the British pound is weakening and in addition to the internal problems in the UK economy, the strength of the US dollar is exerting strong downward pressure to the pair. The signal from the Federal Reserve to reduce its bond purchase program assures investors to pump money into the Dollar as a safe haven asset.
The short-term outlook remains bearish for the GBP / USD pair. The daily chart shows that the pair is below the 200 EMA today at 1.3720. As long as it is below this level, the pound could continue with its fall to 1.3370 that is where the weekly 200 EMA is located. It will be the last dynamic support.
A break and consolidation below 1.3370, the key weekly level and EMA of 200, could be the start of a new bearish wave that will push the pound to the psychological level of 1.30 and up to 61.8% Fibonacci located at 1.25.
Meanwhile, we believe that above -2/8 of murray (1.3427) there will be a recovery because the eagle indicator has reached the level of 5 which represents an imminent technical bounce in the next hours. Therefore, we can buy only if the pair stays above 1.3427.
Support and Resistance Levels for September 28 - 29, 2021
Resistance (3) 1,3601
Resistance (2) 1,3589
Resistance (1) 1,3533
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Support (1) 1,3448
Support (2) 1,3427
Support (3) 1,3393
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Trading tip for GBP/USD for September 29 - 30, 2021
Buy if GBP rebounds at 1,3427 (-2/8) with take profit at 1,3549 and 1,3630 (SMA 21), stop loss 1,3390.
