At the beginning of the Asian session, the GBP/USD pair is trading above the 21-day SMA, (blue line). With the GAP of 142 pips that the price has not yet covered. The 4-hour chart shows that the price is struggling to move above its 21 SMA. Directional moves will continue to depend on the Brexit headlines, and the GAP may remain uncovered.
The GAP that the price left the weekly opening was due to the news that the UK and the EU decided to extend the negotiations until this week. Comments from EU chief negotiator Michel Barnier said they could reach an agreement in the coming days.
However, the 4-hour technical chart shows that the GBP/USD pair continues to consolidate within the trend channel, and with the probability of a sharp break to 7/8 murray at 1.3549. Only if the Brexit headlines are favorable for the UK, contrary to this we could expect a fall to the bottom of the bearish channel at 1.3070.
Our recommendation is that you patiently watch the 21-day SMA. Only if the pair trades above this level, you can buy. If the pair breaks this line and trades below, we can sell with targets indicated on the chart.
The eagle indicator has entered a positive zone, after having broken its imaginary bearish line, it is now above that level, if the eagle indicator remains above that level we could expect a bullish movement in GBP/USD. If it returns to signal below that level, we could expect a fall in the British pound.
The market sentiment for today December 15 has increased as there are 59% of investors who are selling this pair. If this figure continues to rise, we could expect an upward movement for the GBP/USD pair in the coming days, which could reach up to 1.36 approximately.
Trading tip for GBP/USD for December 15 – 16
Buy above 1.3325 (SMA 21), with take profit at 1.3427 (6/8) and 1.3549 (7/8) , stop loss below 1.3280.
Sell if the pair trading below 1.3305 (5/8 and SMA 21), with take profit at 1.3240 and 1.3080 , stop loss above 1.3350.
The material has been provided by InstaForex Company - www.instaforex.com