GBP/USD: following correction the pair is prepared to grow
1. Current trend of GBP/USD
A lot of important data on British and American economics has been released at the end of this week, which increased volatility in the pair. Yesterday the Bank of England announced key interest rate and volume of asset purchase program. The indices remained at the previous levels, so the release of this data hardly had any effect on the movement in the pair. Later, the Pound got support from the strong data on index of manufacturing activity, which demonstrated growth to the level of 54.6, exceeding all forecasts.
The pair soared up to the level of 1.5240. However, after the release of data on labour market and index of business activity in the USA the pair went back to support 1.5100 and consolidated near this level.
Attention today shall be paid to Nonfarm Payrolls and unemployment rate. In addition, the data on personal spending, basic price index for private consumption spending and manufacturing orders will be known today.
2. Important levels: support and resistance
In the last few days the USD has been actively regaining positions, while the pair GBP/USD has already lost more than 300 points. Fundamentals to be published today will be of importance. If unemployment rate remains at the previous level and a number of jobs excluding agricultural sector drops, the USD will go down significantly. UK has been showing positive economic statistics since the beginning of the year, which indicates the economy of the country is gradually recovering. The pair is likely to grow later, amid weak data on the US labour market.
3. Best exit/entry points
In the current situation it is advisable to place long positions with profit taking at the level of 1.5300-1.5400.
4. Supporting facts
On the four-hour chart MACD histogram is in the negative zone below the signal line and is directed downward, indicating either descending correction or the beginning of the downtrend.
Analyst of LiteForex Group of Companies