The British pound managed to break the descending wedge pattern formed since November 24. On Wednesday after the announcement of the Fed's monetary policy, the GBP / USB managed to bounce above the 4/8 of Murray located at 1.3183 and extended its rise for 3 days in a row.
GBP/USD managed to reinforce momentum yesterday after the Bank of England came up with the unexpected decision to raise interest rates from 0.10% to 0.25%. However, the pair was unable to sustain gains and is now retreating.
According to the daily chart, the price of the British pound has rebounded strongly as a correction of the overall downtrend. Right now, GBP/USD is trading above the 21 SMA (1.3291) which adds a bullish outlook for the next few days.
The key is located around 1.3305 (5/8) and the SMA of 21 at 1.3291. This is an important point to consider to continue buying the GBP/USD pair in the coming days. A technical bounce around this zone will be an opportunity to buy with targets of 1.3420 and up to the 200 EMA located 1.3606.
On the contrary, with a daily close below 1.3290, we could expect a correction towards the support of 1.3183. In this area, we expect another technical rebound or a consolidation that could be in progress until the end of December.
The positive signal of the descending wedge pattern could still prevail as long as GBP / USD remains above 1.3183. In the medium term, we expect the final target to be the zone of 1.3606 (200 EMA).
Since November 12, the eagle indicator is hovering above an uptrend channel which could be a confirmation of the bullish signal for the pound in the coming days.
Support and Resistance Levels for December 17 - 20, 2021
Resistance (3) 1.3511
Resistance (2) 1.3427
Resistance (1) 1.3366
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Support (1) 1.3245
Support (2) 1.3183
Support (3) 1.3107
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A trading tip for GBP/USD on December 17 - 20, 2021
Buy above 1.3291 (21 SMA) with take profit at 1.3427 (6/8) and 1.3606 (200 EMA), stop loss below 1.3250.