FX.co ★ Trading Signal for GBP/USD for August 20 - 23, 2021: Buy above 1.3610 (-1/8)

Since the FOMC announced the possible tapering of the bond purchases on Wednesday, the GBP/USD pair has fallen for a long time without showing any technical rebound. It has been 8 consecutive sessions in the 4H bearish candles. At the opening of the New York session, we expect that there will be a technical rebound around -1/8 for Murray (1.3610).

The pound sterling has been under downward pressure due to the UK retail sales data. The reading was worse than expected. It fell by 2.5% in July compared to market expectations of 0.4% growth.

This data, together with the persistent nervousness around COVID-19, and the expectations that the Fed will begin to reduce its asset purchases at the end of this year, has continued to exert downward pressure on the GBP/USD pair. We believe that there may be an imminent technical bounce in the next few hours.

According to the 4H chart, you can see the formation of a descending wedge that ends at the -1/8 Murray line. Consolidation at this level or a break above the technical pattern can occur and could push GBP to the 21 SMA (1.3702).

The pound sterling is very oversold as confirmed by the eagle indicator that has fallen to a level of 5. It means that there could be an imminent upward rebound in the next few hours or the next few days.

The GBP / USD pair has reached the important support, which is the -1/8 Murray line located at 1.3610. If the pair consolidates above this level, we can buy with targets at.1.3670 (0/8) and 1.3702 (SMA of 21).

Our perspective in the short term, is to expect a recovery of the GBP / USD pair, only if it remains above 1.3560, there it is located -2/8 of a murray, it could be the last opportunity for a correction and an upward movement to levels of the 200 EMA located at 1.3811.

Support and Resistance Levels for August 20 - 23, 2021

Resistance (3) 1.3745

Resistance (2) 1.3701

Resistance (1) 1.3653

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Support (1) 1.3586

Support (2) 1.3543

Support (3) 1.3458

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Trading tip for GBP/USD for August 20 - 23, 2021

Buy if breaks 1.3615, with take profit at 1.3671 (0/8), and 1.3702 (SMA 21) stop loss below 1.3580.

Buy if rebound 1.3560 (-2/8), with take profit at 1.3671 (0/8), and 1.3702 (SMA 21) stop loss below 1.3525.