The GBP/USD pair, before the opening of the European session, on the 1-hour chart is trading above the 21 SMA and above the psychological level of 1.40. In addition, we can see that it is located above the strong support of 6/8 of murray.
On the 1-hour chart, you can see the formation of a symmetrical triangle, a break above the upper edge, could be a signal for a bullish momentum of GBP/USD to the 1.4111 zone, in this zone the channel line downtrend converges.
From its highest level this week, GBP/USD has fallen back to the minimum in the 1.4015 area, this level represents a key and psychological level for traders, because below this there could be a fall to 1.37. As long as the price trades above that key point, we expect GBP/USD to strengthen.
On the contrary, as long as it remains above 1.4000, there on the 1-hour chart, the 200 EMA is located, which also offers dynamic support to the pair, therefore a rebound in this area of the moving average could give it a good upward momentum and a good opportunity to buy.
The technical reading of the eagle indicator shows that GBP/USD on the 1-hour chart has reached an oversold level, and there could be a bullish move in the next few hours.
The market sentiment index shows that there are 59.39% of traders who are selling the British pound, this is a sign that there could be a new upward momentum to the 1.41 area in the coming days.
Our recommendation is to buy if GBP/USD bounces in the 1.40 region, or breaks above 1.4050 with targets at 1.4111 for the next few hours. In case of a daily close below 1.40 we should avoid buying and close any bullish position.
Support and Resistance Levels for May 14 - 17, 2021
Resistance (3) 1.4111
Resistance (2) 1.4080
Resistance (1) 1.4062
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Support (1) 1.4008
Support (2) 1.3988
Support (3) 1.3970
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Trading tip for GBP/USD for May 14 - 17, 2021
Buy if the price breaks 1.4050 (symmetrical triangle) with a Take Profit at 1.4111 and a Stop Loss below 1.4000
Buy if the price rebounds at 1.4000 (EMA 200) with a Take Profit at 1.4055 (SMA 21) and 1.4111 (7/8), and a Stop Loss below 1.3965.
The material has been provided by InstaForex Company - www.instaforex.com