The GBP/USD pair is trading at 1.3576 with a bullish bias. We can see that the pair is showing exhaustion and is likely to find resistance at 7/8 Murray around 1.3610.
The most important event this week is the US inflation data on Thursday. The Consumer Price Index is expected to reach 7.3% (yearly). The data will be decisive for the market expectations of the Fed's policy moves.
Risk appetite in the market, coupled with a correction in US Treasury yields, is making it difficult for the US dollar to remain strong against its rivals and is helping the GBP/USD pair with its bullish trajectory.
The US Dollar Index (USDX) is trading under bearish pressure, but has strong support at 95.31. A technical bounce of the dollar index at 4/8 Murray could weaken the GBP/USD pair and push it towards the 21 SMA and towards the 200 EMA around 1.3511.
On the other hand, a pullback towards the area 1.3610 will give us an opportunity to sell GBP/USD with targets towards 1.3549 (6/8) and up to 5/8 Murray at 1.3488.
A daily close below the 1.3500 level will be a negative sign for the British pound and we could expect a drop towards the 4/8 Murray area at 1.3427 and to the level of 1.3360.
Our trading plan for the next few hours is to sell below 1.3580 or wait for a pullback towards 1.3610 with targets at 1.3548 and 1.3511.
The eagle indicator is showing overbought levels and a correction towards the support zone 200 EMA at 1.3511 is likely to follow.
Support and Resistance Levels for February 9 - 10, 2022
Resistance (3) 1.3639
Resistance (2) 1.3619
Resistance (1) 1.3591
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Support (1) 1.3549
Support (2) 1.3512
Support (3) 1.3488
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Scenario
Timeframe H4
Recommendation: sell below o if pullback
Entry Point 1.3580; 1.3610
Take Profit 1.3549; 1.3488
Stop Loss 1.3625
Murray Levels 1.3610 (7/8), 1.3549,(6/8), 1.3488 (5/8), 1.3427 (4/8)
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