In the European pre-market, the GBP / USD pair is trading below the 21 SMA located at 1.4190, and below the extreme resistance of +1/8 of murray. The price is showing depletion of the bullish force after it has peaked at 1.4218.
Yesterday, the British pound reached the resistance zone of 1.4218 very close to the +1/8 of murray due to the persistent weakness of the dollar and the data from the United Kingdom which came better than expected.
The United Kingdom will publish inflation figures for April in the coming hours. The annual Consumer Price Index is expected at 1.4% from 0.7% the previous month. This data could give volatility to the pair, if it is better than expected, so there could be an impulse again to the resistance zone of 1.4222.
The short-term outlook indicates that GBP / USD is running out of bullish momentum. The 1-hour chart shows that the last Japanese candles have failed to break the strong resistance at 1.4222 and is now falling below the 21 SMA for a technical correction move.
A bearish move below this 21 SMA could see a drop in GBP / USD to the 1.4160 support and 1.4130 coincides with the uptrend channel.
On the other hand, a pullback towards the +1/8 murray resistance, and failing to break this level and consolidate above this zone will be a good selling opportunity with targets at 8/8 murray at around 1.4160.
The market sentiment index shows that there are 66.08% of operators who are selling the pair. This is a sign that the pair could again challenge the 1.4222 zone. So if there is a correction in the support zone, it will be a good opportunity to buy.
Support and Resistance Levels for May 19 - 20, 2021
Resistance (3) 1.4316
Resistance (2) 1.4257
Resistance (1) 1.4225
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Support (1) 1.4168
Support (2) 1.4134
Support (3) 1.4085
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Trading tip for GBP/USD for May 19 - 20, 2021
Sell bellow 1.4190 (SMA 21), with take profit at 1.4160 (8/8) and 1.4130, stop loss above 1.4222.
Sell if pullback 1.4222 (+1/8 of murray), with take profit at 1.4160 (8/8), stop loss above 1.4257.
The material has been provided by InstaForex Company - www.instaforex.com