The British pound declined against the US dollar on Tuesday, October 3rd, updating the local minimum of September 14th. The pound was under pressure of disappointing macroeconomic data from UK, as well as comments about Brexit.
Today, the pair is being corrected, as investors prefer to close some of the short positions before the news releases of Wednesday. We are waiting for the speeches of the heads of the ECB and the Fed (19:15 GMT+2 and 20:15 GMT+2), as well as the ADP report on employment in the private sector of the US (14:15 GMT+2).
Support and resistance
Indicator “Bollinger bands” on the daily chart are turning downwards. The price range expands, but the price is outside its boundaries. In the short term, corrective growth may be formed.
The MACD indicator keeps the signal to sell (the histogram is located below the signal line).
Stochastic is located near its minimum values, indicating a strong oversold condition, which can also lead to an upward correction.
Resistance levels: 1.3286, 1.3327, 1.3428, 1.3533.
Support levels: 1.3218, 1.3148, 1.3110, 1.3042.
To open long positions, you can rely on a rebound from 1.3218 followed by a breakout of 1.3286 or 1.3327. Take profit – 1.3500-1.3533. Stop loss can be placed at 1.3200. Term of realization: 2-3 days.
The return of “bearish” sentiment to the market and breakdown of 1.3218 may be a signal to sell with a target of 1.3100. The stop loss is 1.3280. Term of realization: 2-3 days.