21.12.202012:22 Forex Analysis & Reviews: Technical analysis of GBP/USD for December 21, 2020

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Overview :

On the one-hour chart, the GBP/USD pair continues moving in a bearish trend from the resistance area of of 1.3624 - 1.3311.

The GBP/USD pair is trading below 1.3321, crashing by over 413 pips (from the top of 1.3624 to 1.3211 levels) as the UK faces supply chain issues amid travel bans imposed to stop the spread of the new Coronavirus (Covid-19) strain.

Currently, the price is in a bearish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The Relative Strength Index is nearing the 20 level, oversold conditions.

The bias remains bearish in the nearest term testing 1.3181 and 1.3134.

Immediate resistance is seen around 1.3321 levels, which coincides with the weekly pivot.

Moreover, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 1.3321.

the GBP/USD pair has fallen sharply, piercing through the 100 Simple Moving Averages on the four-hour chart and hitting the 100 SMA.

So it will be good to sell at 1.3321 with the first target of 1.3181. It will also call for a downtrend in order to continue towards 1.3134. The strong weekly support is seen at 1.3080.

However, if a breakout happens at the resistance level of 1.3379, then this scenario may be invalidated.

Forecast

If the pair fails to pass through the level of 1.3221, the market will indicate a bearish opportunity below the strong resistance level of 1.3221. In this regard, sell deals are recommended lower than the 1.3221 level with the first target at 1.3181. It is possible that the pair will turn downwards continuing the development of the bearish trend to the level 1.3134 (double bottom), probably next objective 1.3080. Notwithstanding, stop loss has always been in consideration thus it will be useful to set it above the last double top at the level of 1.3379 (notice that the major resistance today has set at 1.3379).

Daily key levels :

Resistance 3 : 1.3516
Major resistance: 1.3437
Minor resistance: 1.3379
Pivot point: 1.3321
Minor support: 1.3180
Major support: 1.3134
Support 3 : 1.3080

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