GBP/USD: the pound continues to grow

Current trend

The British currency grew considerably against US dollar during Wednesday trading marking a new local maximum since October 13. The reason for the development of “bullish” dynamics was yet another wave of weakening of USD in view of reduced returns on US bonds and generally negative tendencies in stock markets. Additional pressure on USD was put by uncertain macroeconomic statistics from the USA.

The pound fell on Wednesday after the release of autumn forecasts of the Exchequer presented by the UK Minister of Finance Hammond. The document provides for the increase of Brexit expenses by 3 bln pounds in the next two years. Hammond emphasized that the Ministry may allocate additional funds but Brexit would not be the main budget item.

On Thursday investors will focus their attention on British GDP in Q3 2017. US markets are closed today due to Thanksgiving Day, and no active dynamics is expected.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is widening. MACD indicator is growing preserving a stable buy signal (the histogram is above the signal line). Stochastic is directed upwards.

Resistance levels: 1.3336, 1.3400, 1.3454.

Support levels: 1.3278, 1.3228, 1.3176, 1.3148.

Trading tips

Long positions may be opened after breaking through the level of 1.336 with targets at 1.3400, 1.3454 and stop-loss at 1.3300. The period of implementation is 1-2 days.

Moving away from the level of 1.3336 as from resistance may be a signal for the beginning of corrective sales with targets at 1.3250, 1.3220 and stop-loss at 1.3380. The period of implementation is 2-3 days.