The Fed is in favor of a quick reduction in bond purchases. In his testimony in Congress, Fed Chairman Powell reiterated that a more rapid reduction of the QE program is necessary so that the Fed can control the high levels of inflation.

If the Fed decides to increase the amount of the cut by 15,000 million already agreed, the dollar could gain strength that could weaken the British pound in parallel. So, GBP/USD could fall to the psychological level of 1.30 in the short term.

According to the 4-hour chart, we can see that GBP / USD is trading below the downtrend channel formed since October 29. The pair is expected to continue its downtrend in the next few hours until the final target at 1.3184.

Our forecast in the next few hours for the British pound is a consolidation below 1.3308 (21 SMA). As long as GBP/ USD is trading below this zone, we will have an opportunity to sell with the target at 1.3250 and 1,3184. If 4/8 is broken, we could sell with targets at 1.3062 (3/8).

On the contrary, if the employment data to be published in the American session is disappointing for the US, it could favor the GBP / USD pair. So, we can only buy if the downtrend channel is broken and if GBP consolidates above 1.3315.

The market sentiment report for today, November 29, shows that there are 71.37% of operators who are buying the GBP/ USD pair. This data provided a bearish sign in the short-term (It is bearish because investors act against the trend). Therefore, the price may again resume its downward movement with the target at 1.3183 (4/8). This will happen if GBP trades below 1.3305.

The eagle indicator is showing a bearish bias, moving below a trend channel. The British currency could extend its weakness in the next days until reaching the support in 4/8 of Murray around 1.3184.

Support and Resistance Levels for December 03 - 06 2021

Resistance (3) 1.3395

Resistance (2) 1.3364

Resistance (1) 1.3332

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Support (1) 1.3256

Support (2) 1.3206

Support (3) 1.3184

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A trading tip for GBP/USD December 03 - 06, 2021

Sell below 1.3308 (21 SMA) with take profit at 1.3250 and 1.3184 (4/8), stop loss above 1.3343.