GBP/USD: short positions are the priority

Current trend

The British pound moved to correction against the US dollar after a significant decline in early July.

The pair reached a key support level of 1.2950, which is the lower border of the broad downward channel, fended off it and went up. Yesterday the momentum slowed down and USD regained some positions, but today the instrument began to grow again. The formation of an upward correction is caused by a decrease in demand for the dollar due to the fixation of short positions at local minima. This is also caused by the technical situation for the pair.

The main catalysts that can significantly affect the trend may be US releases on the growth rate in Q2, orders for durable goods, and the labor market.

Support and resistance

In the short term, the pair may continue to grow with targets at 1.3205, 1.3245, but is unlikely to overcome key resistance levels. The UK economy has slowed, as evidenced by recent data on major sectors of it. At the same time, the dollar recently has significant investment support and is likely to grow again after a slight decrease in interest. In this situation, it is possible to expect the appearance of new lows for the pair by the end of the summer.

Technical indicators on D1 chart and above confirm the forecast: MACD shows the preservation of the high volume of short positions, and Bollinger Bands are pointing downwards.

Support levels: 1.3110, 1.3050, 1.3000, 1.2975, 1.2950, 1.2930, 1.2870, 1.2830.

Resistance levels: 1.3150, 1.3180, 1.3205, 1.3245, 1.3270, 1.3295, 1.3350, 1.3380.

Trading tips

Short positions may be opened from the current level; pending orders can be opened from the levels of 1.3180, 1.3205 with targets at 1.2930, 1.2850 and the stop loss at 1.3290.

Great Britan vs US Dollar

Buy Sell Spread
1.31473 1.31447 26

Scenario

Timeframe Weekly
Recommendations SELL
Entry Point 1.3131
Take Profit 1.2930, 1.2850
Stop Loss 1.3290
Support levels 1.2830, 1.2870, 1.2930, 1.2950, 1.2975, 1.3000, 1.3050, 1.3110, 1.3150, 1.3180, 1.3205, 1.3245, 1.3270, 1.3295, 1.3350, 1.3380

Alternative scenario

Recommendations SELL LIMIT
Entry Point 1.3180, 1.3205
Take Profit 1.2930, 1.2850
Stop Loss 1.3290
Support levels 1.2830, 1.2870, 1.2930, 1.2950, 1.2975, 1.3000, 1.3050, 1.3110, 1.3150, 1.3180, 1.3205, 1.3245, 1.3270, 1.3295, 1.3350, 1.3380

GBP/USD: short positions are the priority

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