GBP/USD has gapped higher on the first day of the new week and is currently trading at 1.3414. The intraday resistance levels are at 1.3441 and 1.3469. The near-term support areas are at 1.3400 and 1.3377.
The pair dropped almost the entire last week and now is near the critical support area of 1.3400. On the intraday charts, a gravestone Doji is present that is perhaps indicating the exhausted bears. Today’s higher gap opening is also suggesting a correction. The SMA-14 is indicating resistance at 1.3557 and the SMA-50 resistance line is at 1.3652. The Pair is keeping below the mid-Bollinger band while the RSI is at 38 and has a slight upwards curve. The candlestick patterns at the bottom currently suggest a correction which makes the pair ideal for buy entries around 1.3410 with a target of 50 to 60 pips and a stop-loss at 1.3385.
On the flip side, a breach below the 1.3400 mark suggests deeper decline. A sell entry is ideal will be ideal under the condition that the pair closes below the 1.3400 mark on the 4-houlry chart. The target for this trade will be 50 to 70 pips with a stop-loss at 1.3435.