GBP/USD: upward trend is expected to resume

Current trend

In February, GBP fell significantly against USD in view of a drop in investor demand for the pound and rising support for the dollar.

The main catalyst for the decline was weak data on the growth of the debt burden, industrial production, and manufacturing in the manufacturing industry in the UK. BoE plans the rate increase this year to be consistent, but less intense. On Friday, the pair reached a key support level of 1.3765, after which an upward wave began to form. Now the pair is trading near the strong level of 1.3900.

Later this week, there will be releases on the US retail sales, inflation, labor market, industrial production and key indices; the UK will publish data on retail sales.

Support and resistance

Technically, the pair remains in the long-term upward channel, and the dollar is still experiencing difficulties, which may indicate the formation of a new upward wave to the levels of 1.4280, 1.4345. An alternative is the possibility of deeper correction of the pair to 1.3690, 1.3650 marks and the resumption of the upward dynamics from these levels.

Releases in key sectors of the economy will become the main catalyst for determining the further movement. Consensus forecasts indicate a slowdown in inflation, a drop in retail sales and industrial production.

Technical indicators on D1 chart are reversed and show a sell signal, MACD indicates a decrease in the volume of long positions, and Bollinger Bands are directed downward.

Support levels: 1.3830, 1.3765, 1.3690, 1.3650, 1.3520, 1.3500, 1.3410.

Resistance levels: 1.3920, 1.4000, 1.4070, 1.4175, 1.4280, 1.4345, 1.4570.

Trading tips

Long positions may be opened from the current level; pending orders can be put from the levels of 1.3830, 1.3650 with targets at 1.4280, 1.4345 and stop-loss at 1.3610.

Great Britan vs US Dollar

Buy Sell Spread
1.39671 1.39644 27

Scenario

Timeframe Weekly
Recommendations BUY
Entry Point 1.3872
Take Profit 1.4280, 1.4345
Stop Loss 1.3610
Support levels 1.3410, 1.3500, 1.3520, 1.3650, 1.3690, 1.3765, 1.3830, 1.3920, 1.4000, 1.4070, 1.4175, 1.4280, 1.4345, 1.4570

Alternative scenario

Recommendations BUY LIMIT
Entry Point 1.3830, 1.3650
Take Profit 1.4280, 1.4345
Stop Loss 1.3610
Support levels 1.3410, 1.3500, 1.3520, 1.3650, 1.3690, 1.3765, 1.3830, 1.3920, 1.4000, 1.4070, 1.4175, 1.4280, 1.4345, 1.4570

GBP/USD: upward trend is expected to resume

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