GBPUSD has taken an exit from our bearish channel, followed by a dovish retest of the upper trend line 1.36769 - failing to break which indicated that the cable will be adapting to hawkish sentiments and hike towards exponential moving average 50 in daily. 50% fibb retracement level is situated at 1.36769 which became a support zone for Pound to take a leap exponential moving average 200 and then EMA 50 in daily time frame. In four hourly time frame, a sharp bearish reversal - marked the monthly pivot (1.3820) as one of the major resistances which needs to be broken for further confirmation of trend. Fed Chair hinted the central bank will likely begin tapering before the end of the year, although it did not imply a direct increase in interest rates. On the other hand, the sterling battles with Brexit chaos, the pessimism surrounding the EU-UK ties over the Northern Ireland (NI) protocol remain a challenge for the British pound.

As for now, investors turn their attention to the UK Bank of England (BOE) Consumer Credit, and US S&P/Case-Shiller Home price to gauge market sentiment.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Cables trading below exponential moving average 200 in four hourly time frame and exponential moving average 50 on daily chart, along side failing to break above our monthly pivot are some of the important factors to be kept in mind for bears to take over. MACD in daily is showing signs of weak bullish momentum in support to the market chart structure while relative strength index in daily is still trading below 50, the aforementioned can become the factors for cables to drop lower towards 1.37236 (weekly pivot) followed by 1.36770. On the bullish side we can observe that GBPUSD has broken it previous weekly support i.e 1.37656 by making smaller degree of higher high at 1.38008, while this is just the beginning of the week, as we see fractals closing above the previous weeks resistances turned supports - would confirm the buy side and every bearish retest should be taken as a good buying opportunity unless we see a closing below 1.3722 and 1.36887.  

GBPUSD

Aug 31 2021

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