FX.co ★ Trading Signal for GBP/USD for July 26 - 27, 2021: Strong Resistance 1.3867

The GBP / USD pair is trading below the 21 SMA and below the downtrend channel. The downward pressure still prevails. As long as the price is below the 200 EMA, there could be a short-term correction towards the zone of support of the 21-day simple moving average.

The British pound is approaching the strong resistance zone of 1.3867. Triple resistance converges at this level (see charts). So, it is likely that a failed attempt to break this level will be a good selling opportunity.

The dollar index (USDX) is consolidating below the resistance of 7/8 of murray. Due to this weakness and correction of the US dollar, the GBP / USD pair has taken this opportunity to rebound from the decline we saw when it traded at the lows of 1.3570.

In the chart above, we can see the technical pattern called the bullish pennant. Its target is 150 pips, therefore this pattern could also give a signal that the pound could continue to rise until it reaches the zone of 1.3867.

On Wednesday, the Federal Reserve is due to unveil its policy decisions to wrap up the policy meeting. Besides, the US will publish the preliminary estimate of the Gross Domestic Product for the second quarter of the year. Investors will be waiting for this data to make a short-term decision and it could set the course for the GBP / USD pair.

On the other hand, if the British pound makes a correction from the current price level. We should expect a technical bounce in the support zone around the 21 SMA at 1.3762. This level could give a further bullish momentum to challenge the zone of resistance of 1.3867.

Our recommendation is to sell below the 200 EMA and below the 3/8 Murray with targets at 1.3762, the area of the 21-day SMA. At this level, we can buy GBP / USD again. The eagle indicator shows a bullish signal.

Support and Resistance Levels for July 27 - 28, 2021

Resistance (3) 1.3916

Resistance (2) 1.3888

Resistance (1) 1.3849

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Support (1) 1.3790

Support (2) 1.3753

Support (3) 1.3701

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Trading tip for GBP/USD for July 26 - 27, 2021

Sell below if pullback 1.3867 (EMA 200), with take profit at 1.3800 and 1.3762 (SMA 21), stop loss above 1.3905.

Buy if rebound around SMA 21 (1.3762), with take profit at 1.3810 and 1.3867 (EMA 200), stop loss below 1.3725.