The British pound has formed a triple top pattern around 1.3640. Earlier in the European session, it hit this resistance zone and was unable to break it.
Currently, GBP/USD is making a technical correction, is approaching the SMA 21 located at 1.3607.
For now, the outlook for the pound remains bullish as it is above the 200 EMA located at 1.3573. We can also see the formation of the uptrend channel on 1-hour chart which enables the pound to continue strengthening in the coming hours.
A sharp break below 1.3600 and a break below the uptrend channel could accelerate the decline of GBP/USD towards the 200 EMA at 1.3573 and 5/8 Murray at 1.3488.
On the contrary, the upside will remain limited as long as it cannot break the barrier at 1.3640. If this level is surpassed, an upward acceleration could take place.
The focus of the markets remains on the situation in Ukraine. The uncertainty surrounding this issue continues to be a relevant factor for the markets, so unforeseen movements could occur.
Our trading plan for the next few hours is to sell below 1.3640, targeting the 21 SMA at 1.3607. Eventually, a sharp break below 1.3595 will be a signal to sell with targets towards 1.3549 and 1.3488. The eagle indicator is moving below a downtrend channel giving a negative signal.
Support and Resistance Levels for February 21 - 22, 2022
Resistance (3) 1.3671
Resistance (2) 1.3655
Resistance (1) 1.3626
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Support (1) 1.3570
Support (2) 1.3549
Support (3) 1.3529
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Scenario
Timeframe H4
Recommendation: sell below
Entry Point 1.3641
Take Profit 1.3607; 1.3549
Stop Loss 1.3680
Murray Levels 1.3671 (8/8), 1.3610 (7/8), 1.3549 (6/8), 1.3488(5/8)
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