GBP / USD has been in a strong uptrend for three consecutive days. From the low of 1.3183 at the zone of 4/8 Murray, the pair has gained over 250 pips and is now facing the resistance of 6/8 Murray around 1.3427.
After breaking the 200 EMA on the 4-hour chart around 1.3350, the British pound gained momentum and now the outlook remains positive for the next few days.
As these two weeks will be the festive celebrations of Christmas and New Year's Eve, the market volume will be relatively low and the volatility of the market could increase due to lack of liquidity. Be careful as very sharp spikes and falls could occur without apparently fundamental data.
Easing concerns about tighter restrictions related to Omicron in the UK and some positive Brexit headlines help the British pound reach price levels of 22 November.
On the 4-hour chart, the eagle indicator reached the 95-point zone, showing overbought conditions. The last time it happened, the pair made a technical correction before regaining its traction. A similar price action could be expected.
The resistance of 6/8 Murray could be a strong barrier to the pound, if it fails to consolidate above this zone. As long as GBP/USFD is trading below this level, we could sell targeting the 21 SMA at 1.3273.
On the daily chart, we can see circles at the level of 1.3427 showing that in the past it has been a strong support and now it has become a strong resistance.
Therefore, below this level (1.3427) we assume a technical correction due to the fact that the pair is overbought. This forecast could support our strategy to sell in the next few hours.
Support and Resistance Levels for December 23 - 24, 2021
Resistance (3) 1.3512
Resistance (2) 1.3462
Resistance (1) 1.3437
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Support (1) 1.3389
Support (2) 1.3348
Support (3) 1.3305
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A trading tip for GBP/USD on December 23 - 24, 2021
Sell below 1.3427 (6/8) with take profit at 1.3305 (5/8) and 1.3273 (21 SMA), stop loss above 1.3465.