The GBP against the dollar is still consolidating in a wide sideways range. In early April, the pair is slowly declining due to the growth of demand for the US currency. There’s a change in market sentiment, investors are more willing to buy the US dollar than other major currencies. In the future, they expect the curtailing the stimulus program of the US Federal Reserve, so the dollar will receive substantial support and the pair will go to the new lows at 1.1900, 1.1830, 1.1770.
At the beginning of this week, it is worth paying special attention to data on key indices of the UK, which will be published tomorrow. In addition, at the end of the week there will be key releases for the United States, as well as statistics on retail sales and the consumer price index.
Support and resistance
In the medium term, the pair is expected to consolidate in the sideways channel. There are not enough drivers in the market that could change the dynamics of the movement. This week the pair can reach the level of 1.2210, after which it will switch to the rising wave. Technical indicators do not give a clear signal, the volumes of MACD fluctuate, and the Bollinger bands on the daily chart have significantly narrowed, which indicates a decrease in volatility of the pair.
Support levels: 1.2365, 1.2285, 1.2210, 1.2125, 1.1990, 1.1900, 1.1830, 1.1770.
Resistance levels: 1.2500, 1.2560, 1.2620, 1.2700, 1.2755, 1.2810, 1.2900.
In the current situation, it is important to increase short positions from the current level and put pending short positions at the key resistances 1.2560, 1.2500 with the target at 1.1990, the stop loss should be set at 1.2660.