Paying attention to the 4-hour chart, you will notice that:
- on Wednesday trading, the breakdown of the strong support level of 1.3819 led to a significant increase in bearish sentiment, and our first target (1.37665) was reached during the European session; also note that at the moment the quotes were very close to our second target – 1.37175,
- in the area of 1.37175 – 1.37335 there is noticeable support for the British pound (GBP),
- Since the beginning of the current day, bullish sentiments have been dominating in this currency pair, but so far the bulls do not have enough strength to break the mirror level of 1.37665.
Now let’s look at the indicators:
- The currency rate has consolidated noticeably below the moving averages with periods of 89, 55, 34 and 144, which are now a series of resistance levels 1.3800 / 015, 1.38195 and 1.38365.
- The MACD histogram crossed the zero line from top to bottom yesterday afternoon, is now 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 is in the oversold zone and is giving an opposite signal as the% K line rises above the% D line.
Due to the contradiction in the signals provided by the indicators, as well as the slowdown in the growth of quotations, as a confirmation that bullish sentiments may increase in the forex market in this currency pair, it is necessary to wait for the breakdown of the mirror level 1.37665, which can open the way to the levels of 1.3819, 1.38535 and 1.3902.
Otherwise, the bears may seize the initiative, and their targets will be the levels 1.37175, 1.3670 and 1.36425.
We remind forex traders that today at 19:00 Moscow time. Jerome Powell, Chairman of the Board of Governors of the Fed, will take part in the discussion of the world economy in a debate hosted by the IMF. Unexpected statements can have a significant impact on the further course of trading.
Resistance levels: 1.37665, 1.37935, 1.3800 / 015, 1.3819, 1.3833 / 365
Current price: 1.3761
Support levels: 1.37335, 1.37175, 1.3705, 1.3682, 1.3670, 1.36425
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