After the significant growth of the British currency against the US dollar in late December–early January, the pair moved to the stage of a downward correction.
It is worth noting that the significant fall of the pair is not due to the growth of the dollar or a negative fundamental background in the UK. The main catalyst for the decline was trading sentiment, namely the fixation of long positions at the peak, which is the key level of resistance. In the future, the momentum intensified, despite the strong releases of industrial production and manufacturing in Britain and opposite the negative data on the US import index. Now the pair is aiming for a strong support level of 1.3450, which is the lower boundary of a wide, long-term upward channel.
At the end of this week, special attention should be paid to data on the labor market, as well as inflation and retail sales indices in the US.
Support and resistance
The pair remains in an upward trend, despite a long downward correction. Consensus forecasts indicate a decrease in the annual inflation rate in the US, but it is worth noting that the declared level of 2% in 2017 was achieved after all. The remaining data for the United States, which will be released at the end of the week, are also projected in the red zone, and this can give the pair an initial push to resume growth.
Technical indicators on the D1 and weekly chart still indicate continued growth, MACD points to a high volume of long positions, and the Bollinger Bands are directed upwards.
Support levels: 1.3480, 1.3465, 1.3410, 1.3380, 1.3350, 1.3300.
Resistance levels: 1.3400, 1.3550, 1.3615, 1.3650, 1.3700, 1.3730.
In this situation, long positions may be opened from the current level with the target at 1.3800 and the stop-loss at 1.3400.
Great Britan vs US Dollar
|Support levels||1.3300, 1.3350, 1.3380, 1.3400, 1.3410, 1.3465, 1.3480, 1.3550, 1.3615, 1.3650, 1.3700, 1.3730|
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