GBP/USD: Technical Analysis and Trading Recommendations_10/20/2021

 
 
 
 
 
 
 

As we noted above, the GBP / USD is currently traded near 1.3755, through which an important long-term support level (ЕМА144 and the upper line of the descending channel on the daily chart) passes.

Yesterday the pair reached a new 5-week high at 1.3832 and the upper border of the descending channel on the weekly chart, mainly on the back of a weakening dollar. However, its further growth has stalled, and today market participants negatively perceived weak statistics from the UK, which indicated a slowdown in inflation in the country in September.

After the breakdown of the support level 1.3755, GBP / USD may decline to the key support level 1.3705 (ЕМА200 on the daily chart), and after its breakdown - into the descending channel on the daily chart. Its lower border is currently between the support levels 1.3370 (ЕМА144, ЕМА200 and the lower border of the descending channel on the weekly chart) and 1.3210 (23.6% Fibonacci level of the correction to the decline of the GBP / USD pair in the wave that began in July 2014 near the level 1.7200). A break of the 1.3210 support level will finally bring GBP / USD back to a long-term bear market.

In an alternative scenario, GBP / USD will resume its growth. A signal to resume buying will be a breakdown of the short-term resistance level 1.3775 (ЕМА200 on the 15-minute chart). Breakdown of the local resistance level 1.3832 will create preconditions for further growth of GBP / USD towards resistance levels 1.3900, 1.3970 (Fibonacci 38.2% correction to the decline of the GBP / USD pair in the wave that began in July 2014 near the level 1.7200), 1.4000.

Support levels: 1.3755, 1.3705, 1.3691, 1.3655, 1.3600, 1.3500, 1.3420, 1.3365, 1.3210

Resistance levels: 1.3775, 1.3832, 1.3900, 1.3970, 1.4000

Trading recommendations

GBP / USD: Sell Stop 1.3740. Stop-Loss 1.3780. Take-Profit 1.3705, 1.3691, 1.3655, 1.3600, 1.3500, 1.3420, 1.3365, 1.3210

Buy Stop 1.3780. Stop-Loss 1.3740. Take-Profit 1.3832, 1.3900, 1.3970, 1.4000