Last week, the GBP / USD pair reached the high of 1.3982 (5/8). After having formed a double-top reversal pattern, the pair made a correction towards the area of the SMA of 21 and towards the level of 1.3916 (4/8).
On Friday last week, the USDX dollar index reached support at 91.75 and from this point the dollar gained bullish strength. This caused the British pound to fall rapidly and also because it was in the overbought zone.
At this week's market opening, the British pound is trading below the 21 SMA and below the 4/8 murray pivot point, so the outlook could remain bearish in the near term.
On Friday, August 6, the non-farm payroll report will be released. An increase in employment is expected during the month of July above 895K. Higher-than-expected employment growth could favor the US dollar and keep the pound under downward pressure.
On the chart, you can see the two areas painted in yellow, which represent the resistance and support levels. They are the key levels that we expect the GBP / USD pair to trade in the next few hours.
Therefore, a pullback towards the 4/8 murray zone will be a good selling opportunity. On the contrary, if GBP / USD falls towards the 200 EMA zone around 1.3841, it will be a good opportunity to buy with a target of 1.3916.
The technical reading of the eagle indicator is showing a bearish signal. Therefore, if the British pound approaches the psychological level of 1.40 and fails to consolidate above this level, it will be a good selling opportunity.
Support and Resistance Levels for August 02 - 03, 2021
Resistance (3) 1.4009
Resistance (2) 1.3959
Resistance (1) 1.3923
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Support (1) 1.3863
Support (2) 1.3828
Support (3) 1.3763
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Trading tip for GBP/USD for August 02 - 03, 2021
Buy if rebound EMA 200 at 1.3841 , with take profit at 1.3916 (4/8), stop loss below 1.3805
Sell below if pullback 1.3916 (4/8), with take profit at 1.3840 (EMA 200), stop loss above 1.3955.
The material has been provided by InstaForex Company - www.instaforex.com