Technical analysis of GBP/USD for January 08, 2021

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Overview :

One-Hour Chart :

The trend of GBP/USD pair movement was controversial as it took place in the downtrend channel. Due to the previous events, the price is still set between the levels of 1.3703 and 1.3428.

So, it is recommended to be careful while making deals in these levels because the prices of .3703 and 1.3428 are representing the resistance and support respectively in long term.

Therefore, it is necessary to wait till the downtrend channel is passed through. Then the market will probably show the signs of a bearish market.

In other words, sell deals are recommended below the price of 1.3703 with the first target at the level of 1.3493. From this point, the pair is likely to begin an descending movement to the price of 1.3493 with a view to test the daily support at 1.3428.

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The GBP/USD pair has faced strong resistances at the levels of 1.3703 because the level of 1.3703 is represented the last bullih wave.

Consequently, the strong resistance has already formed at the level of 1.3703 and the pair is likely to try to approach it in order to test it again.

However, if the pair fails to pass through the level of 1.3703, the market will indicate a bearish opportunity below the new strong resistance level of 1.3703.

Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100).

Thus, the market is indicating a bearish opportunity below 1.3703; for that it will be good to sell at 1.3703 with the first target of 0.3493. It will also call for a downtrend in order to continue towards 1.3428. The daily strong support is seen at 1.3323.

Forecast :

If the pair fails to pass through the level of 1.3703, the market will indicate a bearish opportunity below the strong resistance level of 1.3703. In this regard, sell deals are recommended lower than the 1.3703 level with the first targets at 1.3493, 1.3428. It is possible that the pair will turn downwards continuing the development of the bearish trend to the level 1.3323. However, stop loss has always been in consideration thus it will be useful to set it above the last high price at the level of 1.3703 (notice that the major resistance today has set at 1.3703). The stop loss should always be taken into account, for that reason it will be reasonable to set your stop loss at the level of 1.3753.

The material has been provided by InstaForex Company - www.instaforex.com