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The GBP/USD pair in the morning of the American session, on the one-hour chart, is trading above the SMA of 21, and below the strong resistance of 8/8 of murray located at 1.4160. We can notice that GBP/USD left several small candles on the one-hour chart. This is a sign of exhaustion of the bullish force.
This morning we noticed a rebound in the US Treasury yields. This may allow the USDX to strengthen and push the British pound down.
Also speculations that rising inflation could force the Fed to tighten its monetary policy sooner rather than later, may push US bond yields higher. This data is also limiting the rise of the British pound.
On the one-hour chart above, you can see that GBP/USD remains above the SMA of 21, this is its last dynamic support. if the quote falls below this zone around 1.4130, it could drop to strong 8/8 murray support around 1.4038.
The technical reading of the eagle indicator shows that the pair is in the overbought zone. As it reached the sell level when it touched 95, it is likely that there will be a downward correction movement to the 1.4040 area in the next few hours.
Our recommendation is to sell below 1.4160, or if the 21 SMA is broken on the one-hour chart. Sell below 1.4130 with the target at 1.4040 in the short term.
Support and Resistance Levels for May 11-12, 2021
Resistance (1) 1.4168
Resistance (2) 1.4183
Resistance (3) 1.4252
Support (1) 1.4088
Support (2) 1.4062
Support (3) 1.4019
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Trading tip for GBP/USD for May 11 - 12, 2021
Sell if there is a pullback to 1.4160 (strong resistance and 8/8) with take profit at 1.4110 and 1.4038 (6/8), and stop loss above 1.4196.
Sell below 1.4130 (SMA 21) with take profit at 1.4088 (S1) and 1.4038 (6/8), and stop loss above 1.4175.
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