The British pound is under downward pressure after hitting the low at 1.3838. At the moment, it is recovering slightly and is located above the 21 SMA in 1-hour charts.
On the other hand, on the 4-hour charts, GBP/USD has found strong support at 200 EMA located around 1.3836. We expect it to remain above this level for bullish momentum to the resistance zone around the line of 4/8 of murray.
Observing the graph, we can see that the British pound is trading within a downtrend channel. We can take into account the resistance zone of 1.3875. If the pair makes a pullback towards this zone, it will be a good opportunity to sell with the targets at 1.3820 and 1.3793 (2/8).
On the contrary, if the British pound continues with its bearish movement, we expect a movement towards the support zone located at 1.3820 where there is the bottom of the bearish channel. A technical bounce near this level could give us an opportunity to buy with targets at 1.3877 and if it continues its upward movement at the 200 EMA located at 1.3905.
At the fundamental level, investors are cautiously waiting for the report of the US Consumer Price Index which will be published on Wednesday. Analysts believe that there could be a small increase compared to the previous month. If the data is negative, it could give GBP/USD a bullish boost.
We should also add that the GBP/USD pair has a more robust support at the 2/8 murray zone located at 1.3793. Any unsuccessful attempt to break through this zone will be a good opportunity to buy above this level.
We expect a range of movements between the resistance zone of 1.3916 and the support zone of 1.3793. We could try to trade at these levels and thus minimize our risk. A breakout on either side could be a sign of a trend reversal.
Support and Resistance Levels for August 10 - 11, 2021
Resistance (3) 1.3932
Resistance (2) 1.3911
Resistance (1) 1.3875
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Support (1) 1.3817
Support (2) 1.3790
Support (3) 1.3739
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Trading tip for GBP/USD for August 10 - 11, 2021
Buy if the pair rebounds at 1.3820, with take profit at 1.3877 and 1.3916 (4/8), stop loss below 1.3785.
Sell if the pair pulls back at 1.3885, with take profit at 1.3840 and 1.3793 (2/8), stop loss above 1.3920.