GBP/USD Buy Opportunity? Next Target ?

Fundamental Analysis

Last week GBP/USD broke above the trendline resistance after hitting a swing high of 1.3750, and now GBP/USD is hovering nearly 1.3640 price zone.

After breaking the above trendline resistance, it becomes strong trendline support. Right now, GBP/USD is hovering trendline support. The high swing GBP/USD has dropped more than 120 pips but still holds its ground because of an unexpected fall in the UK unemployment rate. A lower unemployment rate can help BOE to hike rates in 2022.

Fundamentally GBP is under some pressure because of the UK political drama. However, lacked follow-through amid the latest political development in the United Kingdom.

The calls for UK Prime Minister Boris Johnson to resign are rising from within the Conservative party after an admission that he attended a lockdown-breaching party in May 2020. This, in turn, should hold back traders from placing bullish bets around the GBP/USD pair.

The USD is in bit safe because ten years bond is rising. So, foreign investors are jumping to invest in us government bonds. A bond is a safe investment. As foreign investors jump to invest in the US bond market, they need more dollars. as a result, the USD has made some demand fundamentally.

Technical View

Technically, GBP/USD is in the deep buy zone area. SO, GBP/USD may rise from the present price level. As long as GBP/USD holds above the trendline support, there is no doubt that investors will try to buy GBP/USD.

If GBP/USD breaks below the trendline support of the 1.3570 price zone, we may think for sell only. Otherwise, GBP/USD will be considered in buy mode. The first target to the upside is 1.3750, next target is 1.2825, and final target to the upside is 1.4200,