The British currency continues to trade in the downward trend against USD due to the growth of dollar’s investment attractiveness and negative statistics from the UK. At the end of September the pair moved away from the key resistance level of 1.3615, and a downward wave started to form. The pair remains in the long-term upward trend and this decline may be considered long downward correction. The pound is under pressure from recent negative data on economic growth rate in Q2 as well and industrial indexes and PMIs. At the end of the current week special attention should be paid to the data on the level of unemployment and nonfarm payrolls in the USA.
Support and resistance
The pair may move down to the level of 1.3125 which is the lower level of the long-term upward trend. From this level upward wave is likely to form to the levels of 1.3310, 1.3270. Despite rapid fall of the pair, short positions are risky. In Q4 2017 USD may fall again due to weak macroeconomic data on key sectors of the economy or get under sales in case the Fed postpones the tightening of its monetary policy.
Support levels: 1.3200, 1.3125, 1.3125, 1.3020, 1.2930, 1.2835, 1.2775, 1.2700.
Resistance levels: 1.3270, 1.3310, 1.3380, 1.3400, 1.3450, 1.3480, 1.3515, 1.3615.
In this situation long positions may be opened from the key support level and the lower border of long-term upward channel at 1.3125 with targets at 1.3310, 1.3400. Stop-loss should be placed at 1.3040.