On October 11, in the European session, the pound sterling reached the levels of September 28 at 1.3671. It is the 4/8 Murray line that acted as a very strong resistance. GBP/USD could not break it. It continues its downward correction. Now, it is trading at 1.3580. We can see that it has broken the moving average of 21 at 1.3607 it could be a negative signal for the pair.
GBP/USD is located below the SMA of 21 and within the uptrend channel formed since September 28. On the chart, we can see a second bullish channel within the main channel, which was broken. Now, the pound sterling is trading under bearish pressure and could fall to the bottom of the bullish channel around 1.3549.
In the next few hours, GBP is expected to define its next move. It could continue its downward correction until it finds support at 3/8 Murray located at 1.3550, or it could again consolidate above the 21 SMA. Therefore, if a fall occurs to 1.3549 it will be a good opportunity to buy around this area and above 1.3610. In both cases, the objective is located at the EMA of 200 (1.3678).
Only a daily close above the 200 EMA will open the doors for a sustained bullish move to 1.3916, where the strong resistance of 6/8 Murray is located. It could be a good point to buy above 1.3680. As long as the price of the pound is below this level, any bullish movement that approaches this barrier and fails to break it will be considered an opportunity to continue selling.
The oscillator of the eagle indicator has reached the level of 95. This is an overbought signal. The pound sterling needs to make a technical correction before a new bullish sequence. You can see on the chart that the indicator is moving within an uptrend channel. It means that the pound sterling could rebound and continue its bullish movement in the next few days.
Our forecast for the next few hours is to buy only if it bounces off 1.3549 or consolidates above 1.3610. A pullback towards the SMA of 21 and if it fails to break it, it will be a sell signal with targets at the bottom of the bullish channel (1.3550). If the bearish force prevails and breaks this channel continues to sell until the support of 2/8 of murray is located at 1.3427.
Support and Resistance Levels for October 12 - 13, 2021
Resistance (3) 1,3704
Resistance (2) 1,3647
Resistance (1) 1,3615
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Support (1) 1,3557
Support (2) 1,3525
Support (3) 1,3473
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A trading tip for GBP/USD for October 12 - 13, 2021
Buy in case of a rebound at 1.3549 (3/8) with the take profit at 1.3607 and 1.3671 (EMA 200), the stop loss is below 1.3514.