Paying attention to the 4-hour chart, you can see that a short-term ‘equilibrium’ has been found in the forex market in this currency pair:
- on the one hand, at the level of 1.38645, there was a noticeable resistance for the British pound (GBP),
- on the other hand, strong support remains at the level of 1.3826.
Now let’s look at the indicators:
- The currency rate began to move away from the moving averages with periods of 34, 89, 55 and 144, which are a series of resistance levels 1.3887, 1.38995, 1.39035 and 1.3940.
- The MACD histogram is still in the negative zone and below its signal line, continues to decline smoothly and thus gives a signal to sell the British pound (GBP).
- Stochastic Oscillator has come close to the oversold zone and is forming a similar signal, though not clear yet, since the% K line has just crossed the% D line from top to bottom, but has not yet begun to go below it.
Despite the two identical signals, as a confirmation that bearish sentiments may increase in the forex market in this currency pair, it is necessary to wait for the breakdown of the strong support level 1.3826, which can open the way to the levels 1.37775 / 75, 1.37345 and 1.3670.
Otherwise, the rate of the GBP / USD currency pair will continue to move within the 1.3826 – 1.38645 price range.
An alternative (‘bullish’) scenario of the development of events will be ‘activated’ in the event of a breakdown of the resistance level 1.38645, after which the quotes may go to the levels of 1.39225, 1.3960 and 1.3994.
We remind Forex traders that today they should pay attention to a number of events that can have a noticeable impact on the further course of trading:
- at 10:00 Moscow time. UK labor market data will be published,
- at 14:50 Moscow time. Bank of England Governor Andrew Bailey’s pre-recorded speech will be available for the ‘Unlocking Investment for Zero Balance’ panel discussion at the Sustainability Week online event hosted by The Economist.
- at 19:00 Moscow time. Fed Chairman Jerome Powell will testify on the Federal Coronavirus Relief, Mitigation, and Economic Security Act (CARES Act) in front of the Financial Services Committee, U.S. House of Representatives, Washington. Note that the text of the speech has already been published.
Resistance levels: 1.38645, 1.38805, 1.3887, 1.3900, 1.39035, 1.39225, 1.3940
Current price: 1.3836
Support levels: 1.3826, 1.3806, 1.3801, 1.37775 / 75, 1.37345, 1.3670, 1.36425
Market forecasts, analytics and stock news