Overview :
The market opened above the weekly pivot point (1.3166). Last week, the trend continued to move downwards from the level of 1.3166 to the top around 1.3311. The GBP/USD pair is currently trying to settle above the support at 1.3166 as the U.S. dollar continues to lose ground against a broad basket of currencies.
The Moving Average 50 formed a perfect support against the GBP/USD pair, to push trades to rise and attempt to regain the bullish trend. The minor support and major support levels are set at the prices of 1.3227 and 1.3166 respectively.
This would suggest a bullish market because the moving average (50) is still in a negative area and does not show any signs of a trend reversal at the moment.
The price also jumped above the 50-period simple moving averages (SMAs) and the RSI, signaling some more buying interest. The RSI gains its positive momentum clearly, which forms positive factor that might press on the price to rise again.
Today, the first resistance level is seen at 1.3311 followed by 1.3350 and 1.3390, while daily support 1 is seen at 1.3166.
The GBP/USD pair broke resistance which turned to strong support at 1.3277. Right now, the pair is trading above this level. It is likely to trade in a higher range as long as it remains above the support level of 1.3166 which is expected to act as major support today.
Amid the previous events, the GBP/USD pair is still moving between the levels of 1.3166 and 1.3390, so we expect a range of 22.4 pips in coming days.
Therefore, the major support can be found at 1.3166 providing a clear signal to buy with a target seen at 1.3311.
If we do break above the 1.3227 handle, then it is likely that the market goes looking towards the 1.3311 handle after that. The 1.3311 handle after that is a large - the price of 1.3311 represents the double top on the H1 chart.
Therefore, we will continue to suggest the bullish trend for the upcoming period unless the price rallied to breach 1.3350 and hold above it, reminding you that our first positive target is located at the 1.3390 level.
In case the GBP/USD pair manages to settle above this level, it will gain additional upside momentum and head towards the next resistance at 1.3311. A successful test of the resistance at 1.3311 will push the GBP/USD pair towards the next resistance level at 1.3350. This move may be fast since there are no important levels between 1.3227 and 1.3390.
On the support side, the nearest support level for GBP/USD pair is located at 1.3166. If GBP/USD pair declines below this level, it will head towards the next support level at 1.3121. In case GBP/USD pair moves below the support at 1.3121, it will get to the test of the next support level which is located at the 50 EMA at 1.3021. - The expected trend for today : bullish market as long as the trend is still set above the 1.3166 price.
Trading recommendations:
According to the previous events of GBP/USD pair has still called for a strong bullish market since two weeks. Therefore, it will be advantageous to buy above 1.3166 with a first target 1.3311 in order to test the double top. if the price is able to break 1.3311, it may resume to 1.3350. we can expect explosive breakout and it is likely that the market is going to start showing the signs of bullish market towards the third target at 1.3390. On the other hand, stop loss should always be in account, consequently, it will be of wholesome to set the stop loss below the support 1 at the price of 1.3166.
