During the last few days the GBP/USD pair was trading without any certain direction. The price couldn’t break the resistance level of 1.3420, despite of the weakness of USD. If the dynamics maintains, the falling of the pair is expected.
On the other hand, pound is actively supported by the Bank of England, which has left the possibility of interest rate increase even during the Brexit. At first the market supposed that BOE wouldn’t take any actions during this period, but according to the last meeting, the regulator will take some measures if necessary. The UK Government supports the GBP/USD pair, too, sending signals that the access to the free market in the EU will be kept.
Today Markit Manufacturing PMI in the UK and in the USA will be published, which can bring volatility to the market. In the short term the key issue for “bulls” can be the breakout of the level of 1.3420, which will reflect the development of the upward trend.
Support and resistance
The downward trend is expected in the middle term. In the short term the targets are 1.3260, 1.3200. The pair stays in the long term upward trend and entered the correction, which can develop to the lover border of the channel at the level of 1.3080. Technical indicators confirm the fall: MACD’s short positions volumes are growing, Bollinger Bands are pointed downwards on the 4-hour chart.
Resistance levels: 1.3320, 1.3380, 1.3420.
Support levels: 1.3260, 1.3200, 1.3150, 1.3080.
Short positions can be opened at the level of 1.3260 with the target at 1.3200, stop loss is 1.3290.
Long positions can be opened at the level of 1.3320 with the target at 1.3380, stop loss is 1.3300.