In 4-hour charts, GBP/USD is trading below a downtrend channel and below the strong resistance line of 4/8 of murray. The market is anticipating crucial data from the United States, the NFP for July. We think it could be bearish for the British pound.
This week, the Bank of England indicated that it is willing to change its monetary policy modestly. The market reacted positively and the British pound rose to the resistance zone of 1.3955.
On the other hand, the dollar index stands tall above the 200 EMA in 1-hour charts which adds downward pressure to the British pound.
In a few hours, the non-farm payroll data will be published. The market expects an increase of 870,000, if the data is higher than expected, it could pressure the British pound down.
According to the 4-hour chart, we must watch the pivot point of 1.3916. If the British pound trades below this level, it will be a good selling opportunity with targets at the 200 EMA around 1.3841.
The medium-term outlook could remain bullish only if it consolidates above the 200 EMA. A technical bounce off this support will give it GBP/USD further bullish momentum to the resistance zone of the 1.40 psychological level.
Support and Resistance Levels for August 06 - 09, 2021
Resistance (3) 1.3992
Resistance (2) 1.3959
Resistance (1) 1.3915
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Support (1) 1.3838
Support (2) 1.3805
Support (3) 1.3763
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Trading tip for GBP/USD for August 06 - 09, 2021
Sell below or if pullback 1.3916 and 1.3933, with take profit at 1.3840 (EMA 200), stop loss above 1.3970.