GBP/USD is extending its decline ahead of US employment data. At time of writing, it is trading at 1.3280 with a very bearish bias.
The dollar index (USDX) has been rising sharply above 98.60 aheda of the NFPs release. The pair remains under pressure in the context of risk-off mood the financial markets due to the situation in Ukraine.
According to the daily chart, a downtrend channel can be seen formed since January 11, from the high at 1.3747.
In the next few hours, the price of the British pound is likely to bounce off the bottom of the 0/8 Murray support around 1.3188 if selling pressure prevails.
Following the second round of the peace talks on Thursday, the military aggression in Ukraine continues. According to the news, Russia has attacked and taken control of the Zaporiozhzhia nuclear power plant.
If the situation continues to worsen between Russia and Ukraine, it is likely that the US dollar will be a safer option to invest in, just like gold.
Therefore, any bounce towards the zone resistance 4/8 Murray or towards the 21 SMA will be considered an opportunity to continue selling the British pound.
In the next few hours, we expect a technical rebound because the eagle indicator is showing an oversold signal.
We could take advantage of buying above 0/8 Murray (1.3188) or above support of Dec 2.
We will have the opportunity to buy only if the pound remains traded above 1.3180. On the contrary, if GBP/USD breaks this zone, the downward acceleration is likely to continue and the price could reach the psychological level of 1.3000.
Support and Resistance Levels for March 04 - 07, 2022
Resistance (3) 1.3427
Resistance (2) 1.3366
Resistance (1) 1.3305
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Support (1) 1.3241
Support (2) 1.3202
Support (3) 1.3183
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Scenario
Timeframe H4
Recommendation: buy if rebound
Entry Point 1.3187 or 1.3220
Take Profit 1.3305; 1.3427
Stop Loss 1.3130
Murray Levels 1.3427(4/8), 1.3366(3/8) 1.3505(2/8), 1.3244(1/8)
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