Before the opening of the European session on 4H charts, the GBP/USD pair is trading above the 21 SMA and below the 8/8 of Murray. The pound sterling is moving upwards and rising for the second day in a row. It recently hit a new high at 1.4160, driven by a weaker US dollar.
The pound sterling could break the resistance level of 1.4061, and could find strong resistance in the 1.4190 area, a little higher is 1.4222 (+2/8 of Murray).
According to the fundamental analysis, this week there will be a lot of volatility in the GBP/USD pair, as the labor market data will be released in a few hours, tomorrow the inflation data and April retail sales on Friday. These reports are undoubtedly going to have a major impact on the pound sterling.
The dynamic support is located in the area of the SMA of 21 (1.4078), this level is key as it could offer a bullish rebound for the GBP/USD pair. A break to the downside would expose the next dynamic support located at the 200 EMA around 1.3905.
The market sentiment report shows that there are 58.56% of operators are selling the GBP/USD pair compared to this figure with last week. We have seen a decrease of 3.61%, this is a sign of exhaustion and there could be a technical correction before a new impulse.
The technical reading of the eagle indicator shows that we are facing an overbought zone, it is imminent that there may be a bearish movement in the coming days.
On the chart, you can see that a triple top pattern could be forming. So, if the GBP/USD pair consolidates below 1.4160, there could be a downward movement in the short term.
Support and Resistance Levels for May 18 - 19, 2021
Resistance (3) 1.4225
Resistance (2) 1.4190
Resistance (1) 1.4175
----------------------------
Support (1) 1.4113
Support (2) 1.4085
Support (3) 1.4046
***********************************************************
Trading tip for GBP/USD for May 18 - 19, 2021
Sell bellow 1.4160 (8/8 of murray), with take profit at 1.4078 (SMA 21), stop loss above 1.4199.
Sell if pullback 1.4190 (8/8 of murray), with take profit at 1.4078 (SMA 21), stop loss above 1.4232.
The material has been provided by InstaForex Company - www.instaforex.com