GBP/USD: the pair is preparing to break through 1.5490
1. Current trend of GBP/USD
Since last week the pair has been within downward correction, which had been provoked by the FOMC Minutes publication. ThisTuesday Pound has already lost more than 150 points. Even positive GDP data from UK couldn’t stop the fall. According to the preliminary forecasts, GDP will rise up to 0.7% exceeding the expectations. There are no important releases in trader’s calendar for today, but tomorrow we anticipate the speech of BOE Mark Carney. His speech will probably cause high market volatility.
2. Important levels: support and resistance
We can see a development of the downward movement. The price is moving towards middle MA of Bollinger Bands 1.5490. If this level is broken through, the pair will go further down to the level of 1.5400 and even to the lower border of the uprising channel. Otherwise the price can return to the levels of 1.5600 and 1.5650. Regarding the situation I would recommend to open short trades with Take Profit orders at 1.5400.
3. Technical indicators
On the daily chart indicators confirm the possibility of fall. Bollinger Bands are directed upwards, but the price chart is moving towards the MA. MACD histogram is in overbought zone. It crosses signal line from above, forming a signal to sell. Stochastic lines have entered oversold zone, giving another signal to sell.
Analyst of LiteForex Group of Companies