FX.co ★ Trading Signal for GBP/USD for August 9-10, 2023: buy above 1.2695 (4/8 Murray - head-shoulders)

Early in the American session, the British pound (GBP/USD) is trading around 1.2716 below the 21 SMA and below the 200 EMA located at 1.2788. We can observe the exhaustion of the bearish force.

During the European session, the British pound tried to break the 200 EMA located at 1.2788 but failed and is now under bearish pressure.

In the next few hours, it is expected to reach 1.2695 as a key technical rebound level since 4/8 Murray represents a positive level for the British pound.

In the 4-hour chart, we can see the formation of a technical reversal pattern called Head and Shoulders. If the GBP/USD breaks out sharply and consolidates above 1.2788 (200 EMA) we could see the British pound in the next few days reaching 1.2939 (5/8 Murray) and the psychological level of 1.30.

On the contrary, in the event that the GBP/USD pair falls below 1.2690, a bearish acceleration is expected to continue. The price could reach 1.2619, an important support where it left the formation of a Japanese candlestick called the Pin Bar. If this scenario occurs, it is likely to get a technical bounce and could form a double bottom pattern which would also be seen as an opportunity to buy on the bounce.

The eagle indicator is giving a positive signal after reaching the 10-point zone on August 8. It is possible that any pullback will be seen as an opportunity to buy during the next few days, only if the trade is above 1.2695.