In the European session, the British pound reached the level of 1.36. This level coincides with the top of the downtrend channel that was formed in the 4-hour charts since October 27. You can visualize the three circles that we have drawn which represents a strong resistance for GBP/USD. Below this zone, there will be a correction in the next few hours towards the SMA of 21 located at 1.3526.
After falling to 6/8 murray on November 4 around 1.3427, the British pound has made a correction of more than 180 pips. The price now remains above the 21-day moving average and this would represent a positive signal for the pair. As long as GBP/USD remains above this zone, we could expect a technical bounce at 1.3526. If the pair makes a sharp break in the downtrend channel, the price could rise quickly to the zone of 1.3673 where there is the 200 EMA.
The market sentiment report shows that there are 64.05% of traders who are buying the GBP/USD pair. This is a negative signal for the pound and more downward pressure is expected in the coming days. Hence, the pair could touch the level of 1.3427.
Our trading plan for the next few hours is to sell GBP/USD below the downtrend channel with targets towards the 21 SMA. At this level, we expect a consolidation and it could be an opportunity to buy on a technical rebound with targets towards 1.3580. If the top of the channel is broken, we could continue buying with targets towards 1.3673 where there is the strong resistance of 8/8 of murray.
Having fallen on November 4 to the key level of 5-points (extremely oversold market), hte eagle indicator now broke the downtrend channel that originates from October 21. The indicator has managed to move above, which could be a bullish signal. We must wait for a correction to make sure that GBP/USD is set to continue its upward movement to the level of 1.3671.
Support and Resistance Levels for November 09 - 10, 2021
Resistance (3) 1.3671
Resistance (2) 1.3649
Resistance (1) 1.3605
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Support (1) 1.3527
Support (2) 1.3476
Support (3) 1.3427
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A trading tip for GBP/USD for November 09 - 10, 2021
Sell below 1.3575 (top bearish channel) with take profit at 1.3526 (SMA 21), stop loss above 1.3610.
The material has been provided by InstaForex Company - www.instaforex.com