GBP/USD Daily Outlook: Hurry up and catch this opportunityThe GBPUSD pair has interestingly managed to break the recent range in order to retest a horizontal resistance area , despite risk-off supporting the US dollar and market worries over the delta virus variant. However, one thing to note here is that new cases are dropping in the UK and hospitalization rates remain low => GBP strength intraday.
With the USD focused on the FOMC, where talks could point on tapering by year end or early 2022 (although the August Jackson Hole event could provide more details), the USD should remain well bid ahead of the FOMC. Risk-off, China-US tensions, and lower equities in Asia and Europe (despite strong earnings reports from last week) is another key indicator that supports my USD near-term bullish bias.
Enough with fundamentals, let's take a look at the charts. How to trade the pair?
The 1-hour chart shows bullish momentum diminishing in decreasing trading volume , and the RSI has formed a bearish divergence with today's high in the pair. The 61.8% Fib remains more or less in-tact (on higher timeframes, today's bull move looks like a wick), and a horizontal resistance area is there to provide another obstacle for buyers.
A bearish engulfing pattern is forming right now, so you may still catch this trade. SL near the 78.6% Fib level, and TP near the lower 1.36xx levels (with scaling into the winning position on each lower low.)
