InstaForex

August 23, 2021

Can GBP/USD Rise Again From the $ 1.3600 Support Zone?

 UK manufacturing and services sector data to be published at 4.30pm local time is expected to influence the movement of the Pound Sterling currency in the European session.


The pound in the past week has exhibited a dismal performance, moving weakly until the weekend failing to be supported by published economic data.




On the price chart of the GBP/USD pair, the weekly decline was recorded around 270 pips until the price dropped to the support zone of 1.36000.


The support zone was also the focus during the decline in trading last July, but the price still failed to continue the decline to lower levels.


In the Asian session on Monday morning as well, the price again showed a rebound from the support zone of 1.36000 giving an early signal of a bullish movement on the GBP/USD chart.


However, the upside factor was seen to be more driven by the depreciation of the US dollar earlier in the week as expectations for the Federal Reserve (Fed) to implement a reduction in bond purchases (tapering) were seen back away.



Trading that continued at the beginning of the European session was seen slightly above the Moving Average 50 (MA50) barrier in the 1 -hour time frame of price movement with the expectation of higher gains to continue.


However, data on the UK economic sector is expected soon which will drive price movements until the next session.


The price increase is expected to test the SBR (support become resistance) zone of 1.37000 first before continuing higher to the next SBR zone at 1.38000.


If the price plunges back below the support zone of 1.36000, the bearish trend of last week's price is expected to continue again this week.


Further declines saw the 1.35000 level become the price target which had previously been the focus of early January trading.