The British pound on 4-hours chart, is trading above the 21 SMA and above the 200 EMA. Yesterday, it reached 1.3520. From that level it is making a technical correction and is likely to find a bounce around the SMA of 21 at 1.3470.
Since December 17, the pound sterling has been hovering in an uptrend channel. This channel still remains intact. If a bounce at the bottom of the channel is confirmed, it could give it a further bullish momentum to reach 7/8 Murray around 1.3550.
On the contrary, if in the next few hours, the pound makes a close on the 4-hour chart below 1.3460, the correction is likely to accelerate and could fall to the 200 EMA around 1.3380 and to 5/8 Murray around of 1.3305.
The eagle indicator reached a key level of extreme overbought and a correction is imminent in the next few days. Therefore, as long as it remains below the psychological level of 1.3500, a correction could occur.
Support and Resistance Levels for December 31, 2021
Resistance (3) 1.3596
Resistance (2) 1.3554
Resistance (1) 1.3521
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Support (1) 1.3427
Support (2) 1.3374
Support (3) 1.3305
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A trading tip for GBP/USD on December 31, 2021
Buy in case of a rebound at 1.3470 (21 SMA) with take profit at 1.3550 (7/8), stop loss below 1.3432.
