The British pound is trading at 1.3781 with an uptrend that is limited below the 200 EMA and below the 2/8 murray. This level is strong resistance and the GBP / USD pair could make a correction as long as it remains below this level.
The weakness of the dollar index #USDX, caused by the moderate stance of the US central bank on Friday, encourages the GBP / USD pair to continue its rise.
UK COVID-19 cases remain high. Daily infection rates are still around 31,000 people, and it could be a factor against the British pound strengthening and could weaken consumer confidence in the Kingdom.
The critical level of 1.3795 will be the key. With a definitive break and consolidation above this level, the GBP / USD pair could continue its bullish movements until 1.3855 level of 3/8 and quickly reach 4/8 of murray at 1.3916.
On the other hand, if the GBP / USD pair fails to consolidate above 1.3793, the downward pressure that is going on below the 200 EMA and the 2/8 murray line could push the pair down, and this it could a fall to the support of the 21 SMA located at 1.3740.
The key support is located at 1.3732. This level will be the key as a technical rebound could occur and give a new upward impetus to the GBP / USD pair. Besides, it could be a good point to buy with the target seen at 1.3855.
Following a final consolidation below 1.3730, the British pound could enter a bearish phase and could accelerate its decline to the critical support of -1/8 murray around 1.3610.
In view of the fact that the pair maintains an uptrend in 4-hour charts, it would be prudent to expect the pound sterling to trade in a support zone to buy the pair again. The eagle indicator is showing a bullish signal.
Support and Resistance Levels for August 31, 2021
Resistance (3) 1.3824
Resistance (2) 1.3809
Resistance (1) 1.3793
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Support (1) 1.3759
Support (2) 1.3732
Support (3) 1.3702
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Trading tip for GBP/USD for August 31, 2021
Sell below EMA 200 at 1.3793 with take profit at 1.3730 (1/8), stop loss above 1.3830.
Buy if the pair rebounds at 1.3732 with take profit at 1.3793 and 1.3855 (3/8), stop loss below 1.3700.