InstaForex

August 23, 2021

GBP/USD Decline Returns To Support Zone Last July

 The bearish pattern displayed more clearly this week on the GBP/USD currency pair chart seeing the dominance of the US dollar over the Pound Sterling.


Towards the end of the week, the US dollar continued to strengthen its position in the market as it recorded a rise to a 9 -month high.


UK economic data is also seen as failing to support the movement of the Pound due to concerns about the spread of Covid-19 which also hit the country.


With current market sentiment in favor of the US dollar, the Pound is expected to be hit more severely to close this week’s trading.




On Tuesday, the price dropped below the 1.38000 level before the price rose on Wednesday and retested the SBR (support become resistance) zone.


Signaling for bearish movement, the price that tested the Moving Average 50 (MA50) barrier level on the 1 -hour time frame continued yesterday’s lower decline.



On Thursday, the price recorded a daily decline of around 120 pips past the support level of 1.37000.


Continuing today's trading (Friday), the price is expected to continue its decline to test the 1.36000 support zone which was also the focus last July when it managed to rebound the price.


But will the same situation be repeated or vice versa?


If the lower price drops beyond the support zone, the decline will continue to reach the next focus level around 1.35000 which is an important level in January trading.


For the bullish situation, the price that manages to cross the 1.37000 zone will re -test the SBR 1.38000 zone and signal a change in the bullish trend of the price.