In the New York trade, the British pound is retreating below the top of the bearish channel formed in the 4-hour chart. This channel represents a strong barrier for the pair. Yesterday, it tried to break when it reached 1.3647, but the pair has not been able to achieve it. Now GBP/USD is retreating and the decline is likely to continue to 2/8 of murray located at 1.3427.
At this time of writing the analysis, the pair is trading just above the SMA of 21, located at 1.3573. If in the next few hours the price consolidates below this level, there is the probability of a downward movement to 1.3490 where is the bottom of the bullish channel that was formed after it consolidated at 2/8 of murray.
The break of the secondary uptrend channel could accelerate the decline of the GBP / USD pair towards the key support level of 2/8 of murray at 1.3427. The pair is expected to trade below 1.3575, so we can sell with targets at 1.3480. If a technical bounce occurs at the bottom of the bullish channel, there will be an opportunity to buy.
On the other hand, if there is a pullback back to the top of the main bearish channel around 1.3620, or if in the next few hours the British pound consolidates above 1.3585, then we must wait for it to test the bearish line again. If a break does not occur, it will be an opportunity to sell with targets at 1.3575 and 1.3480.
The short-term outlook is bearish for GBP. The currency pair may continue with its main downward movement because the 200 EMA is located at 1.3696. The level acts as a strong top exerting downward pressure. As long as the price remains below this level, every attempt to recover will be an opportunity to sell.
Support and Resistance Levels for October 06 - 07, 2021
Resistance (3) 1.3652
Resistance (2) 1.3618
Resistance (1) 1.3589
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Support (1) 1.3549
Support (2) 1.3525
Support (3) 1.3480
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Trading tip for GBP/USD for October 06 - 07, 2021
Sell below 1.3579 (SMA 21) with take profit at 1.3527 and 1.3480, stop loss above 1.3618.
