Early in the European session, the British pound (GBP/USD) is trading at around 1.1061 above the 21 SMA. On the 1-hour chart, we can see the sharp break of the symmetrical triangle. Only if GBP/USD settles above the psychological level of 1.10, a recovery could occur.
According to the 1-hour chart, we can see that since October 4, the British pound has been trading within a downtrend channel. A sharp break of this channel could mean recovery for the pair and it could reach the 200 EMA located at 1.1150 and could even reach the resistance zone of 7/8 Murray at 1.1230.
GBP/USD is defending the psychological level of 1.10. Yesterday in the American session, it reached a low of 1.1018. In the coming hours, the British pound is expected to trade above this level and could reach the resistance zone of 1.1348. On the 4-hour chart, there is the 200 EMA and it will be an immediate target.
The non-farm payrolls report was better than expected, which supports the Fed's plan for further tightening. In addition, the unemployment rate fell from an estimated 3.7% to 3.5%. This information creates pressure on GBP/USD. In case of a drop below 1.10, the pair could fall towards the support of 1.0742 (0/8 Murray).
The area of 1.1000 - 1.1020 has become a strong support for the British pound. In case of a technical bounce around this level in the next few hours, it will be seen as a buying opportunity with targets at 1.1150 (200 EMA) and 1.1362.
The eagle indicator is giving a positive signal. It is likely that if the British pound recovers above 1.1020, the outlook will be positive. If GBP/USD consolidates above 1.1150, the signal will clearly suggest buying with targets at 1.1230 (7/8 Murray) and 1.1362.
