The GBP / USD pair, at the opening of the American session, is trading below the 200 EMA and below the 21 EMA, and bouncing above the uptrend channel.
The GBP / USD pair, fell to a four-day lows, although it managed to find decent support, near a short-term rising trend line, around the 1.3772 region.
The continued decline in US Treasury yields dragged the US dollar to two-week lows, so we saw the EUR / USD hit 1.19.
The GBP / USD pair had already discounted this data, and was trading at overbought levels near the 200 EMA (1.3916). For now, as long as it remains above the ascending trend channel, we can expect a staggered recovery of the pair for the next few hours.
However, the rise will remain limited, as investors now seemed reluctant to place aggressive bets ahead of the release of the minutes of the FOMC meeting, to be released in a few hours.
Investors have been forecasting the prospects for a Fed rate hike earlier than expected amid the upbeat US economic outlook, thanks to the impressive pace of coronavirus vaccines.
Our recommendation is to sell below 1.3850, there is a strong resistance that coincides with the SMA of 21, if the pair fails to sustain above this level, we can sell with targets at 1.3780 and 1.3730.
A break in the uptrend channel could accelerate the decline of the GBP / USD pair, and find support in the 1.3730 area, there the weekly support is located and may offer a technical rebound.
Support And Resistance Levels For April 07 - 08, 2021
Resistance (1) 1.3795
Resistance (2) 1.3845
Resistance (3) 1.3885
Support (1) 1.3730
Support (2) 1.3649
Support (3) 1.3593
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Trading tip for GBP/USD for April 07 - 08, 2021
Buy if rebound 1.3730 (Strong Support), with take profit at 1.3785 and 1.3850 (SMA 21), stop loss below 1.3690.
Sell if pullback 1.3850 (SMA 21), with take profit at 1.3790 and 1.3730, stop loss above 1.3890.