Not much has changed in the Forex market on Monday. Both of our major currency pairs traded consolidated within narrow price ranges and this picture could continue in the days ahead. We recommend traders not to invest too much and stay on the sidelines until market conditions change.
We remind traders that the week before the U.S. Labor Day holiday is notorious for its quiet and illiquidity. In other words, big market moves could be missing in the coming days.
Since the pair remains in overbought territory while testing the 1.1830-resistance area this morning, we prepare for a correction in the latest upward movement. For the bullish movement to continue, we will keep tabs on a break above 1.1860 which could see a test of 1.1890-1.1920. Dollar bulls, on the other side, will have to wait either for a sustained break below 1.17 or a failed attempt to break above 1.19 in order to push the pair lower towards the crucial 1.16-support.
GBP/USD – As long as the cable holds above 1.3650-10, we see a next resistance at around 1.3820. An upside break of 1.3910 could spur bullish action towards 1.40. Breaking, however, significantly below 1.36 could pave the way for a sell-off towards 1.34.
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