The GBP / USD pair from the low of 1.3730 has recovered, after having broken the pattern of the descending wedge at 1.3770. In one of our signals we anticipate this upward movement of the British pound. You can review this article here. After the sharp break, the pair was released from the downward pressure and is now near the resistance level of 1.3916 zone of 4/8 of murray.
At the beginning of this week, the GBP / USD pair is trading with a bullish bias. In a 1-hour chart, it is close to the strong resistance of 4/8 of murray. There could be an impulse to test this zone. If it cannot break that area, we hope for a correction to the 200 EMA zone located at 1.3840.
Prime Minister Boris Johnson announced that the UK would fully reopen its economy on July 19, removing hundreds of restrictions related to COVID-19. However, coronavirus cases continue to rise in Great Britain, mainly related to the Delta variant.
This factor may affect the British pound, and a fall could occur to the minimum of 1.3730. On the contrary, a return of the price to the area of the psychological level of 1.4000 is expected. Criticism of the opposition and the opinion of experts in health can affect the strength of the pound sterling.
Our outlook will remain bullish as long as the Pound is above the 200 EMA (1.3820), and the 2/8 Murray support zone. Whenever the pair falls to these levels, it will be a good opportunity to buy.
According to the chart, the GBP / USD pair is in the overbought zone. The eagle indicator is showing a probability of a correction in the next few hours towards the area of the 21 SMA or the 200 EMA.
Our recommendation is to sell around the 1.3935 area or below 1.3916 (4/8) with targets at 1.3814. In turn, at this level we expect a technical rebound to buy with targets at 1.3916.
Support and Resistance Levels for July 12 - 13, 2021
Resistance (3) 1.4100
Resistance (2) 1.3996
Resistance (1) 1.3950
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Support (1) 1.3852
Support (2) 1.3790
Support (3) 1.3702
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Trading tip for GBP/USD for July 12 - 13, 2021
Buy if rebound EMA 200 at 1.3840 , with take profit at 1.3916 (4/8), stop loss below 1.3805
Sell below 1.3916 (4/8), with take profit at 1.3840 (EMA 200), stop loss above 1.3952.
The material has been provided by InstaForex Company - www.instaforex.com