The British currency continues to go up against US dollar in view of the falling USD rate. Within two trading weeks the pair has been moving within the upward tendency without long corrections which indicates considerable decrease of demand for USD. US fundamental data cannot support the rate of the American currency. This and last week negative statistics was released on a number of macroeconomic indicators, namely construction sector, demand for durable goods, and labor market. The pound, in turn, is supported by strong demand and positive releases by key indexes.
Despite negative data on UK PMI, GBP continues to grow. In the end of the current week special attention should be paid to labor market data and the main US indexes, as well as the decision of the Bank of England on the volumes of economic stimulation program and interest rate. Moreover, the follow-up speech by the head of the Bank of England Mark Carney scheduled for Thursday, may provide additional support for the pound.
Support and resistance
Technically the pair has a reserve of upward movement to the upper border of the upward channel at the level of 1.3450 followed by a long downward tendency. Currently there are no grounds for USD support from the fundamental background and the actions of the US regulator. Technical indicators confirm this tendency: MACD shows the preservation of the high volume of long positions, and Bollinger Bands point upwards.
Support levels: 1.3200, 1.3125, 1.2930, 1.2805, 1.2700, 1.2590.
Resistance levels: 1.3310, 1.3380, 1.3450, 1.3480, 1.3670, 1.3750.
Long positions may be opened from the current level with target at 1.3450 and stop-loss at 1.3100.