The pair GBP/USD switched to the stage of lateral consolidation after a substantial growth in mid-January. The upward momentum reached the key resistance level of 1.4345 (the upper limit of the upward channel). Then growth was replaced by a fall and the pair entered the sideways channel.
At the beginning of the trading week, there are no key releases in United States or UK, which will ensure the further formation of a lateral trend. In the second half of the trading week in the US there will be data on the labor market, the index of production prices and the decision of the Fed on rates. The UK will respond with data on mortgage lending and the consumer confidence index.
Support and resistance
At the peak of the price, investors prefer to open short positions and close long positions, which ensures a fall in the pair. In the future, a deeper correction movement downward with targets of 1.4000, 1.3820 is expected. The oversold dollar will gradually begin to gain investor demand, even despite weak fundamental indicators. A downward correction may turn into a trend, but for a reversal of a long-term uptrend the pair needs to fall below the 1.3650 level, which is unlikely in the current situation. The main forecast is the downward correction to the levels of 1.4000, 1.3900, 1.3820, the reverse and the formation of a new upward wave.
Support levels: 1.4070, 1.4000, 1.3900, 1.3820, 1.3690, 1.3650, 1.3520, 1.3500.
Resistance levels: 1.4175, 1.4280, 1.4345, 1.4570.
Pending short positions can be opened at the level of 1.4280 with targets of 1.4000, 1.3820 and stop loss at 1.4370.
Great Britan vs US Dollar
|Take Profit||1.4000, 1.3820|
|Support levels||1.3500, 1.3520, 1.3650, 1.3690, 1.3820, 1.3900, 1.4070, 1.4175, 1.4280, 1.4345, 1.4570|
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