The British pound, as well as other majors, tends to rise against the US dollar. At the end of the past and the beginning of the current trading week, the pair reached a number of key resistance levels and tested a number of new local highs.
The main reason for this was substantial sales of the US currency in view of falling demand, the emergence of negative macroeconomic statistics, and an ambiguous situation regarding tightening of monetary policy in 2018. Last week, the US dollar weakened on negative data on the labor market, key indices, inflation, and retail sales. Regarding such background, there is no need to expect an early rate increase, which caused a reduction in the volume of short positions in the pair and the growth of long ones. The momentum only increased after taking a 1.5-year local maximum level of 1.3650.
Today, the trend persisted and the pair continued to grow. It is worth noting that the pair is moving by means of trade sentiment due to the lack of important macroeconomic data. Key indicators for the UK, namely inflation data and other key indices, will be released tomorrow. The main releases for the USA are due at the end of the current week.
Support and resistance
Technically, the pair has reached the upper border of the broad, ascending channel, but it is unlikely that the pair will be able to pass the level of 1.3820 without a good downward correction. The probability of formation of a downward correction or channel of lateral consolidation is high for the levels of 1.3735, 1.3690, and 1.3650. Further, there are no prerequisites for deeper downward movement, and the probability of resuming upward movement after correction is very high. In the first quarter of this year, it is possible to see the pair at 1.4000, 1.4070 marks.
Technical indicators fully support the upward trend, MACD points to a serious increase in the volume of long positions, and Bollinger Bands are directed upwards on all high timeframes.
Support levels: 1.3735, 1.3690, 1.3650, 1.3615, 1.3550, 1.3520, 1.3410, 1.3350, 1.3320.
Resistance levels: 1.3820, 1.3900, 1.4000, 1.4030, 1.4070, 1.4150.
Deferred long positions may be opened from key support levels of 1.3735, 1.3590, and 1.3650 with the target at 1.4000 and stop-loss at 1.3570.
Great Britan vs US Dollar
|Entry Point||1.3735, 1.3590, 1.3650|
|Support levels||1.3320, 1.3350, 1.3410, 1.3520, 1.3550, 1.3650, 1.3615, 1.3690, 1.3735, 1.3820, 1.3900, 1.4000, 1.4030, 1.4070, 1.4150|
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