The pound sterling is trading with a strong bullish bias. On December 21, GBP/USD broke the 200 EMA. Now, it is consolidating above this level and above the 21 SMA, thus showing a positive outlook for the next few days.
Recent optimism over reports that the Omicron variance could be less severe than feared gave the pound sterling a boost. It is likely to continue its trend for the next few days.
Another factor that helped the recovery of the pound sterling was the correction of the US dollar index (#USDX) after having reached high levels around 96.91. It is now making a correction and is likely to consolidate around the zone of 95.79 (200 EMA). This correction will be taken advantage of by the GBP/USD pair. We could expect a bullish move in the next few days to the psychological level of 1.3500.
The pound could accelerate the upward movement and could reach the key psychological level of 1.35 00. Momentum could widen and push the price through 6/8 of a Murray representing strong resistance. The price could reach the level of 1.3550 (7 / 8) in the next few days.
On the other hand, a correction towards the 200 EMA around 1.3350 will give us an opportunity to buy the pair again with the target levels at 1.3427 and 1.3550. The outlook could change and the trend could be bearish if the pound returns and trades below 1.3330. Then, it could resume the bearish movement and fall to the support level of 1.314 (4/8).
Our trading plan is to expect a sharp break above the bullish pennant pattern around 1.3400, with the target levels at 1.3500 and 1.3550 (7/8). On the other hand, a technical bounce around 1.3350 will be an opportunity to buy again. The eagle indicator is in the overbought zone and a correction is likely in the coming days before a new bullish wave.
Support and Resistance Levels for December 27 - 28, 2021
Resistance (3) 1.3495
Resistance (2) 1.3445
Resistance (1) 1.3427
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Support (1) 1.3366
Support (2) 1.3333
Support (3) 1.3305
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A trading tip for GBP/USD on December 27 - 28, 2021
Buy above 1.3400 or in case of rebound off at 1.3350 (200 EMA) with take profit at 1.3427 (6/8) and 1.3550 (7/8), stop loss below 1.3350.
