GBP/USD: the pair is in the upward long-term trend

Current trend

The downward correction continues. In the beginning of the current trading week, the momentum strengthened, and pound against the American dollar went down to the strong support level of 1.3830, after which the pair entered the consolidation.

The main decrease catalyst is the growth of the demand on the oversold USD and change of trading moods. The investors are closing profitable long positions and are opening short ones, so GBP is losing its investment attractiveness. The additional factor for dollar strengthening were strong employment market, factory orders, and main indices data at the end of the last week.

This week the pair was moving due to the trading moods against the lack of macroeconomic news in USA and UK. Today the BoE interest rate decision, Asset Purchase Facility, and Monetary Policy Summary will be published in the UK.

Support and resistance

The maintenance if the interest rate in highly possible in the UK. On the other hand, positive commentaries and economic development perspectives can support the pound.

In the middle term the end of the correctional movement and a formation of the upward wave with the targets at 1.4280, 1.4345 is expected, and the price can renew its highs by the second quarter. On the daily chart, technical indicators reflect the growth perspective, MACD keeps the high volume of long positions, and Bollinger Bands are pointed upwards.

Support levels: 1.3830, 1.3690, 1.3650, 1.3610, 1.3520, 1.3500, 1.3470.

Resistance levels: 1.3900, 1.4000, 1.4070, 1.4175, 1.4280, 1.4345.

Trading tips

It is relevant to increase the volumes of long positions at the current level and to open pending positions from the levels of 1.3690, 1.3665 with the targets at 1.4280, 1.4345 and stop loss at 1.3590.

 

Great Britan vs US Dollar

Buy Sell Spread
1.39562 1.3954 22

Scenario

Timeframe Day’s Range
Recommendations BUY
Entry Point 1.3900
Take Profit 1.4280, 1.4345
Stop Loss 1.3590
Support levels 1.3470, 1.3500, 1.3520, 1.3610, 1.3650, 1.3690, 1.3830, 1.3900, 1.4000, 1.4070, 1.4175, 1.4280, 1.4345

Alternative scenario

Recommendations BUY LIMIT
Entry Point 1.3690, 1.3665
Take Profit 1.4280, 1.4345
Stop Loss 1.3495
Support levels 1.3470, 1.3500, 1.3520, 1.3610, 1.3650, 1.3690, 1.3830, 1.3900, 1.4000, 1.4070, 1.4175, 1.4280, 1.4345

GBP/USD: the pair is in the upward long-term trend

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