Yesterday, the GBP/USD pair registered a new high of 2020, at 1.3554 due to the Brexit hopes. Reports indicated that significant progress has been made, but a final agreement has not yet been published, it is all speculation. According to Reuters, an EU official has said that fishing remains the main obstacle.
In the course of a few hours before the start of the American session at 7:00 am GTM-5, the Bank of England will publish its policy decision. The central bank is expected to maintain current levels of facilities and rates.
At the technical level, in the 1-hour chart, we note that GBP/USD has bounced off the 21 SMA, around 1.3460, if this level is broken in the next few hours, the next key support zone will be the 6 / 8 murray at 1.3427 and a drop lower at the 200 EMA at 1.3370.
On the other hand, as long as the GBP/USD price remains above the 21 SMA, above 1.3505, we could expect an upward movement to the 1.3554 zone yesterday's high, and if this zone breaks, the next level of resistance we expect in the 8/8 of murray at 1.3671.
The risk is skewed to the upside, while hopes persist about the Brexit. The eagle indicator shows that the bull market still has strength, before entering overbought levels, yesterday we saw that the indicator rebounded after correcting the overbought conditions of yesterday.
The market sentiment for today shows that there are 63% of operators who are selling this pair, we notice a decrease compared to yesterday's figure, which is likely that if GBP/USD fails to make new highs, we could see a drop to the 1.3360 level.
Trading tip for GBP/USD for December 17 – 18
Buy above 1.3505 (SMA 21), with take profit at 1.3554 and 1.3671 (8/8) , stop loss below 1.3465.
Sell if the pair trading below 1.3480, with take profit at 1.3427 (6/8) and 1.3370 (EMA 200) , stop loss above 1.3520.
Buy if rebound at 1.3365, with take profit 1.3427 and 1.3540, stop loss below 1.3315.
The material has been provided by InstaForex Company - www.instaforex.com