In the early American session, the GBP/USD pair is trading at 1.3320 below the 21-day EMA, which is located at 1.3405, adding downward pressure. On the other hand, on the daily chart that you can see in the photo, GBP/USD is above the 21-day EMA, at 1.330. So, we could consider that GBP is waiting for a daily break of the moving average and a consolidation below this level would change the trend to medium term.
This makes you cautious. You have to wait for sustained weakness below the 1.3305 region that coincides with the 5/8 murray, before betting on a possible further bearish move. The pair could become vulnerable and accelerate the decline towards the 1.3183 region (4/8 murray). Further down, support near the 1.30 psychological level follows. Therefore, if the British pound decisively breaks the 1.3305 area, it should pave the way for an extension of the corrective decline.
On the other hand, the 1.3410 region now appears to act as immediate resistance, at this level is the 21-day EMA in the 4-hour chart. Sustained strength above this region will change any short-term bearish bias. The bulls could then aim to regain the psychological 1.35 level and touch the 8/8 murray level at 1.3671.
Our recommendation is to sell below the 21-day EMA, that is, below 1.3410, if the market pulls back towards this level, it would be a good selling opportunity up to the 5/8 murray levels at 1.3305. Also if the price breaks the area of 1.3305, and consolidates below this region, we could sell with targets at 1.3255 and 1.3185.
The eagle indicator on the daily chart is showing a bearish signal. However, before the possibility of a trend change, we should expect a break of the trend channel that you can see on the chart. That could favor a move to the 1.30 levels in the medium term.
When it comes for the market sentiment for today December 8, 2020, we note that he is in 62% of investors who are selling this pair, which means that we could expect an upward rebound in the zone of the trend channel of 1.3255. The issue of Brexit will also influence this technical perspective, which we must be very careful.
Trading tip for GBP/USD for December 08 – 09
Sell if the pair pullback to 1.3410 (6/8 and EMA 21) with take profit at 1.3305, and 1.3255, and stop loss above 1.3445.
Sell if the pair breakout to 1.3305, with take profit 1.3255 (tren line) and 1.3185, Stop loss above 1.3350.
The material has been provided by InstaForex Company – www.instaforex.com
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