Relevance up to 10:00 2021-03-09 UTC+3
The GBP/USD pair has been cut down to size in recent days, suggest that the weakness may continue from the area of 1.4008 – 1.3954. Because Pound was losing ground against some major currencies such as Euro and Yen last week.
The British Pound was among the best performers against the greenback. The GBP/USD pair is still setting above the 1.4008 level since last week week. The GBP/USD pair is struggling around 1.3886and at risk of falling further.
The GBP/USD’s correction from 1.4008 extended to as low as 1.3775 last week -bottom. Initial bias stays on the downside this week for 50% retracement of 1.4008 to 1.3886 at 1.3775 – weekly close 1.3837.
The GBP/USD pair trades in the 1.3886 price zone, with a a strong bearish stance in the near-term. The one-hour chart shows that the pair spent the day hovering around its 50 and 100 EMAs. Furthermore, the trend is still showing weakness below the moving average (100).
The pair is now speeding down below them, favoring a bearish extension. The RSI indicator flaps around 40, indicating increasing selling interest. A strong support level is 1.3775, where the pair bottomed this week.
Therefore, strong support will be found at the level of 1.3775 providing a clear signal to sell with a target seen at 1.3724.
If the trend breaks the minor support at 1.3775, the pair will move downtrends continuing the bearish trend development to the level 1.3724 in order to test the daily support 1.
The GBP/USD pair is showing signs of weakness following a breakout of the lowest level of 1.3724.
Since the trend is above the 38.2% Fibonacci level (1.3954), the market is still in a downtrend.
If the GBP/USD pair is able to break out the daily support at 1.3724, the market will decline further to 1.3675 to approach support 2 today.
Thus, the market is indicating a bearish opportunity below the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside.
On the upside, break of 1.4008 minor resistance will argue that the correction has completed, and bring retest of 1.4138 high.
However, the price spot of 1.4008 and 1.4138 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 1.4138 is not breached.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Mourad El Keddani,
InstaForex Group © 2007-2021
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