GBP/USD: Dynamics analysis and forecast for the future
1. Current trend of GBP/USD
On Thursday the currency pair GBP/USD significantly strengthened, gaining more than 150 points and reaching to the level of 1.5630. Support to the British currency was provided by the data, showing that retails sales in the country rose up by 1.1% in July. On the other hand, volume of industrial output in the US remained unchanged compared with the previous month, which also provoked the rise in the pair. However, today ascending movement has shifted to correction.
Attention shall be paid to some US macro-economic statistics, scheduled for the release today, including important data on number of construction permits and number of new houses construction in July. According to experts these indices may increase, which will trigger the rise in the USD and continuation of the corrective movement.
2. Important levels: support and resistance
At the moment the pair has pushed off from the upper limit of the ascending channel, providing probability of continuation of upward movement to the level of 1.5550, which coincides with the level of 50.0 Fibonacci. If this level is broken down, the price can go down further to the levels of 1.5490 and 1.5400, coinciding to the moving average line of the Bollinger bands indicator and the level of 61.8 Fibonacci. However, a chance that ascending movement will continue cannot be ruled out, especially if American statistics will be negative. In such case the price can go up to resistance level of 1.5730. In the current situation short positions can be opened with the target of 1.5490. Long positions are recommended from the level of 1.5670 with profit taking near 1.5730.
3. Technical indicators
On the daily chart indicators give mixed signals. Bollinger bands are directed upward; however the price chart has broken the upper line, which gives a chance of decline. MACD histogram is in the overbought zone, volumes are increasing. Stochastic lines are intersecting, going upward and forming a buy signal.
Analyst of LiteForex Group of Companies