Yesterday, early in the American session GBP/USD fell to the SMA of 21 on the 4-hour chart at 1.3086. This happened after the Bank of England announced the increase in interest rates.
Today at the beginning of the Asian Session, GBP/USD reached the level of 1.3186 zone of 4/8 Murray. the price could not break it and made a drop. Now it is located around the SAM 21 at 1.3158.
A break below the 200 EMA could accelerate the drop to 3/8 Murray at 1.3061. If bearish pressure prevails, the pair could drop to 1.2939 (2/8Murray).
On the 1-hour chart, we can see the formation of a diamond pattern. If this technical attern is broken below 1.3133, it could confirm a bearish move towards the area 1.3060 and the price could reach the level 1.2940.
On the contrary, strong resistance is observed in the area of 1.3211 that coincides with the highs of March 7 and March 10. If GBP/USD consolidates above this level in the next few hours, it is likely to reach the resistance zone of 5/8 Murray located at 1.3305.
Since March 16, the Eagle indicator is oscillating in the overbought zone. It is likely that a correction may occur in the British pound in the next few hour and this could be a signal to sell as long as GBP/USD trades below the 21 SMA located at 1.3158.
Our trading plan is to sell at current price levels around 1.3158 or break the 21 SMA at 1.315. We could sell with targets at 1.3061 (3/8 Murray). The break of the 200 EMA located at 1.3133 could confirm the downward movement which will help us sustain our selling. The Eagle indicator supports our bearish strategy.