Last week the Federal Reserve shocked the markets by signaling two increases in the interest rate in 2023, bringing forward its projections that they had for 2024. The central bank also improved other forecasts, such as inflation, with underlying prices which will settle at 3% in 2021 and praised the rapid recovery.
Last week, the British pound in weekly charts had a movement from 1.4131 to 1.3790, more than 300 pips of fall in a week, due to this hawkish message from the Fed and the problems that the United Kingdom is going through the resurgence of the new Indian strain of COVID 19.
This week, the GBP / USD pair is expected to gain ground. We note that in the 4-hour chart, the price has found support at the 2/8 of murray, an important level where a technical correction could occur and that could lead to a rise to the zone of 4/8 of murray located at 1.3916.
Another point that we can mention is that in 4-hour charts, the GBP / USD pair is below the 200 EMA. Now this moving average remains neutral at 1.41, a medium-term bullish rebound is likely to this area, if the pair holds or consolidates above 1.38.
The weekly chart shows that the SMA of 38 is located together with the 4/8 of murray around 1.3671. This level on previous occasions has been a strong support for the GBP / USD pair. Therefore, if the pair falls to this level, it will be a good opportunity to buy, since a fall to this area will be an oversold signal.
In the next few days, the British pound is expected to make a correction and may bounce above 2/8 of a murray (1.3793). We believe this will be a good opportunity to buy if the pair trades above this zone.
The key resistance is at the SMA of 21 around 1.3965, a little below the 4/8 of murray is a key level of reversal. If the British Pound fails to overcome this area, we expect there to be a continuation of the downward movement and a good point to sell the pair.
Our recommendation is to buy above 1.3793 with targets at 1.3855 and 1.3916. The eagle indicator is showing an oversold signal and an imminent correction movement in the next few hours.
Support and Resistance Levels for June 21 – 22, 2021
Resistance (3) 1.4049
Resistance (2) 1.3906
Resistance (1) 1.3843
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Support (1) 1.3743
Support (2) 1.3690
Support (3) 1.3645
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Trading tip for GBP/USD for June 21 - 22, 2021
Buy above 1.3825 or if rebound 1.3790, (2/8 of murray), with take profit at 1.3855 (3/8) and 1.3919 (4/8), stop loss below 1.3790 and 1.3755.
The material has been provided by InstaForex Company - www.instaforex.com