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Trading Signal for GBP/USD on June 6-7, 2022: sell below 1.2599 (21 SMA - 200 EMA )


GBP/USD bounced during the European session on Monday from the key support zone at 1.2475 to 1.2576 just at the top of the downtrend channel. This level has become strong resistance for the British pound.

A little higher, in the event that the downtrend channel is broken, the pound should face the 200 EMA located at 1.2599. This level is strong resistance and it is likely to exert downward pressure and return th pair to the level of 1.2475.

Conversely, a close on the daily and 4-hour charts above 1.2600 will be a clear signal to buy, with targets at 4/8 Murray around 1.2695. The price could go as high as 5/8 Murray at 1.2817.

Meanwhile, the British pound is expected to trade inside the downtrend channel in the next few hours. A close on 4-hour chart below the 21 SMA at 1.2537 could be a clear signal to sell, with targets 2/8 Murray at 1.2451. The pair could even reach the bottom of the downtrend channel at 1.2385.

Non-farm payrolls increased by 390,000 in May, above the market consensus of 325,000, and the unemployment rate remained at 3.6% (consensus: 3.5%). This was favorable for the US. The dollar is likely to resume its bullish trend in the American session which could exert downward pressure on the British pound.

Our trading plan for the next few hours is to sell below the 200 EMA or below the 21 SMA, with targets at 2/8 Murray around 1.2451. Eagle indicator is giving a slightly bearish signal which supports our strategy.

Trading analysis offered by RobotFX and Flex EA.