Trading Signal for GBP/USD for January 05 – 06, 2021: Inverted Pennant
The GBP / USD pair at the opening of the American session, is trading below the SMA of 21, after yesterday’s correction the pair is consolidating below this level, if it remains below this moving average, we could expect a move down to Murray’s 6/8 zone at 1.3427.
In the 4-hour chart in the GBP / USD pair we notice a technical formation of an inverted pennant, which is a bearish continuation pattern, which if it breaks the low of yesterday could occur a fall to the area of 1.3427, and continue further down to the 1.3305 area of Murray 5/8.
The eagle indicator on the 4-hour chart is giving a bearish signal, which supports the technical pattern mentioned above, therefore our recommendation is to sell below 1.3585.
Conversely, if GBP / USD trades above 1.3615 again, our bearish outlook would be invalidated and there could be a bullish move to 1.3723.
The market sentiment for today January 5 shows a figure of 55% of operators that are selling this pair, which adds a favorable perspective that a bearish movement of GBP / USD could occur in the short term.
Support And Resistance Levels For January 05-06, 2021
Resistance (1) 1.3603
Resistance (2) 1.3745
Resistance (3) 1.3828
Support (1) 1.3503
Support (2) 1.3440
Support (3) 1.3341
Trading tip for GBP/USD for January 05-06, 2021
Sell below 1.3585 (SMA of 21) with take profit at 1.3427, stop loss above 1.3625.
Buy if rebound around EMA 200 at 1.3415, with take profit 1.3549 and 1.3670, stop loss below 1.3375.
The material has been provided by InstaForex Company – www.instaforex.com