The British pound is trading below the 200 EMA and below the 21 SMA. It is making a break of the uptrend channel. However, at the current price level around 1.3793 the support of 2/8 murray is located that could offer some relief from the bearish pressure.
The USDX dollar index, after having found support at 91.91, is making a bullish rebound and could push GBP/USD down in the next few hours.
The British pound was affected by the comments of Michael Saunders of the Bank of England (BoE). He said that economic conditions would determine when interest rates could be raised. He added that as much stimulus is not necessary nowadays as it was in the past.
Investors responded with sell-offs of the British pound. When a recovery was seen around 1.3855, the currency pair fell until trying to break its uptrend channel. Now it is trading at 1.3793.
The 4-hour chart of the GBP / USD pair indicates more declines ahead since the pair has fallen below the moving averages of 21 and 200. In addition to this, the eagle indicator is showing a bearish signal. If the break is confirmed through a pullback below 1.3793, the price could fall to 1.3732 and 1.3671.
On the contrary, if the GBP / USD pair shows that it has been a false break, it should consolidate above 1.3816, and go up to the resistance of 1.3916. This key level was challenged when the pair touched the top of the bullish channel.
Support and Resistance Levels for September 07 - 08, 2021
Resistance (3) 1.3907
Resistance (2) 1.3887
Resistance (1) 1.3837
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Support (1) 1.3788
Support (2) 1.3758
Support (3) 1.3664
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Trading tip for GBP/USD for September 07 - 08, 2021
Sell below 1.3793 (2/8 and EMA 200), with take profit at 1.3732, stop loss above 1.3835.
Buy above 1.3816 (SMA 21), with take profit at 1.3916 (4/8), stop loss below 1.3780.