Before the opening of the European session, the GBP/USD pair is trading on 4-hour charts below the SAM of 21 and below the 8/8 of Murray, trading within a symmetrical triangle with a. downward bias.
On Monday, Fed Board Governor Lael Brainard spoke about inflation concerns, saying she expects price spikes associated with supply and the economy reopening to ease over time.
In the UK, CBI sales were reported, unexpectedly contracting to 18 points in May from the 20 seen in the previous month, down from the 24 expected. In addition, the net debt of the public sector increased to 30.962 billion pounds in April, worse than expected.
On the chart, we can see a double top in the +1/8 area around 1.4221 and also the symmetric triangle. We expect the pair to trade within the two upper and lower lines of the triangle within a range between 1.4185 / 90 and 1.4140.
The break below this symmetrical triangle and the consolidation below the 1.4160 level of 8/8 Murray could have a downward movement to the support of 1.4099 (7/8 of Murray) and to the level of strong support of 6/8 of Murray located at 1.4038.
With a break of the symmetrical triangle and consolidation above 1.4180, the pound sterling could seek the +1/8 Murray resistance zone around 1.4232. If it breaks this level, it could reach the extremely overbought zone of +2 / 8 of Murray around 1.4282.
The technical reading of the eagle indicator is showing a slightly bearish signal due to the negative divergence. Since it reached the 95 points of the indicator, a pullback to the upper line of the symmetrical triangle is likely for a new bearish wave.
Before the opening of the European session, the market sentiment report shows 85.70% of traders who are selling the GBP/USD pair. This is a sign that in the short term there could be a downward movement to the 1.4038 area.
Support and Resistance Levels for May 26 – 27, 2021
Resistance (3) 1.4252
Resistance (2) 1.4227
Resistance (1) 1.4198
----------------------------
Support (1) 1.4103
Support (2) 1.4070
Support (3) 1.4007
******************************************************
Trading tip for GBP/USD for May 26 - 27, 2021
Sell bellow 1.4160 (SMA 21 and 8/8), with take profit at 1.4099 (7/8), and 1.4038(6/8) stop loss above 1.4196.
Sell if pullback 1.4190 (symmetrical triangle), with take profit at 1.4150 and 1.4099 (7/8), stop loss above 1.4235.
The material has been provided by InstaForex Company - www.instaforex.com