GBP/USD: Trend reversal signal at key support level, time to buy

Overview:- GBP/USD is trading below 1.2300, struggling amid concerns of a no-trade-deal Brexit and reports of infrastructure spending. The US dollar remains robust amid upbeat data and corona virus headlines. From last couple of days we are watching a clear blood bath in the pair where it started to decline from 1.3127 and continuously slipped to 1.2201 level which is a major downfall since 2007. Well the way bears have reacted so far it seems like they are beating the bulls like black and blue and pair is making successively lower lows and lower highs aggressive like leaps and bounds.

Fundamental Analysis:-

British Finance Minister Rishi Sunak is expected to unveil a “significant financial package” on Tuesday for firms hit by the coronavirus outbreak, a Daily Mail reporter tweeted on Monday.”Sunak is expected to unveil the package at a press conference alongside UK Prime Minister Boris Johnson, the tweet said, citing sources.”

UK finance minister to attend Tuesday’s coronavirus press conference alongside PM Johnson. UK finance minister to unveil ‘significant financial package’ on Tuesday to help firms hit by coronavirus outbreak

Technical Analysis:-

GBP/USD looks for clear directions amid broad bearish trend. Monday’s candlestick suggesting a trend reversal, oversold RSI question the sellers. Buyers will wait for a sustained break of 200-day SMA for entry. oversold RSI pushes the buyers to look for entry.

Bears are leading in the game and playing at front foot and they are dominating the bulls for the time being but yesterday a trend reversal candlestick indicates that bears are now exhausted and now it’s bull’s turn. The question still arises that weather bulls will make the drive or not ?

We will keep our view bullish on the pair as long as 1.2000 level remains intact. Odds are in favor of bulls and intraday bias remains bullish on pair. Pair is moving far away from the minor and major EMA lines which suggest that bulls will come up to retest the moving average lines at least.  The bullish divergence on the RSI is also suggesting buying the pair which is a leading indicator.

What next:-  The 1.2500 level is immediate resistance level followed by 1.2700 whereas 1.2100 level is strong key support level followed by 1.2000 level.

Trade idea:- Based on chart and studies above we can suggest that buy the pair around current levels 1.2250  target is 1.2500 and 1.2800 sl is 1.2000 level.