The GBP/USD pair rose rapidly on Friday from the low of 1.3680 to the high of 1.3779, almost adding 100 pips in a single day, after the long-awaited speech of Jerome Powell.
The Chairman of the Federal Reserve was much more emphatic on this occasion, stating that the central bank could begin to cut bond purchases during 2021, which shows that there is no specific schedule. He also stressed that the Fed is in no rush to raise the interest rate, something that will only take place in 2023.
Technically, the pound sterling would be facing a new bullish wave. Last week, it made a retracement towards the 50% Fibonacci zone. Now, it is projected to move above the high of 1.3766, which means that the market could continue its uptrend.
On the other hand, the US dollar index has fallen against all its major crosses, which gave a boost to the GBP/USD pair. It quickly reversed from Friday's low of 1.3679 [50% Fibonacci] to the August 18 level, at 1.3780.
According to the chart, we can see that the GBP/USD pair is located above the SMA of 21, showing a bullish perspective, but with a top in the bearish channel that is projected from July 29.
The 1.3799 resistance zone is located at the 200 EMA. At the same level, there is also the Murray 2/8 line and the bearish channel line. We believe that this level has become a strong resistance, which could prevent the pound sterling from continuing to rise.
If the GBP/USD pair breaks above 1.3799 and consolidates above this level, there could be a further upward momentum to the 3/8 Murray zone located at 1.3855 and could reach 4/8 Murray at 1.3916 level of August 6.
On the other hand, a correction towards the 21 SMA located at 1.3730 can be a sign of a bullish move. It can be a good opportunity to buy around this level with targets at 1.3799 and 1.3855.
The technical reading of the eagle indicator on 4H charts is showing a bullish signal. So, any pullback towards support levels will be a good opportunity to continue buying the GBP/USD pair.
Support and Resistance Levels for August 30 - 31, 2021
Resistance (3) 1.3877
Resistance (2) 1.3825
Resistance (1) 1.3793
Support (1) 1.3730
Support (2) 1.3697
Support (3) 1.3664
Trading tip for GBP/USD for August 30 - 31, 2021
Buy if rebound 1.3730 (SMA 21) with take profit at 1.3793 and 1.3855 (3/8), stop loss below 1.3700.
Sell if pullback at 1.3799 (EMA 200) with take profit at 1.3730 and 1.3670, stop loss above 1.3835.The material has been provided by InstaForex Company - www.instaforex.com