On the 4-hour chart, the GBP / USD pair is trading below the 21 SMA and above the 200 EMA located at 1.3829. The price is moving within a downtrend channel with immediate support at 2/8 murray around 1.3794.
The GBP / USD pair may have some volatility on Thursday with policy decisions of the Bank of England. Analysts expect the central bank to stay pat on its monetary policy. Rates are expected to be put on hold, but the bank may begin to reduce its asset purchases.
In the 4-hour chart of GBP / USD, it can be seen that yesterday the pair made a pullback towards the pivot line of 4/8 of Murray, which has now become a strong resistance that on previous occasions has contained the pair under downward pressure.
The immediate support of the British pound is found at the EMA 200 (1.3829), and below it is located 2/8 of the murray line, this level is key because a break below this area could lead to a change in trend up to 1.3670.
The downward pressure is expected to keep the pair trading below 1.3916, until it finds support at the 1.38 area, and until this week's events are released.
The GBP / USD pair will be able to continue trading within a range between 1.3916 and the 1.3794 support. A break above or below these levels could be a continuation of the primary uptrend or the continuation of the secondary downtrend.
The market sentiment report shows that there are 51.60% of operators who are selling the GBP / USD pair. This is a sign that there could be a downward correction to the 1.38 zone and bounce to 1.3916, a range zone in the short term.
Support and Resistance Levels For May 04 - 05, 2021
Resistance (1) 1.3927
Resistance (2) 1.3958
Resistance (3) 1.3993
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Support (1) 1.3864
Support (2) 1.3826
Support (3) 1.3754
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Trading Tip for GBP/USD for May 04 - 05, 2021
Sell if pullback 1.3916 or 1,3940 (Strong resistance and 4/8 of murray) with take profit at 1.3830 (EMA 200), stop loss above 1.3950 and 1.3975.
Sell below 1.3900 (SMA 21) with take profit at 1.3830 (EMA 200) and 1.3794, stop loss above 1.3945.