On Monday the Pound started to regain last week’s losses and the pair rose for more than 100 points. Investors’ interest to the growing Pound is still high and favourable statistics on all economic sectors is another motivation to buy British currency. In addition, activity of the “bulls” increased in advance of the data on the British GDP, as the index is expected to be high. The data on American orders for durable goods, as well as index of manufacturing activity and consumer confidence will become known.
Support and resistance
If GDP turns out to be short of expectations, the British currency will soar up to resistance level of 1.6740. However, the rise in the Pound is likely to be short-lived and the maximum level of 1.6740. In the medium-terms it is expected that American dollar will grow amid changes in the monetary policy. Another reduction in volume of QE3 program will give significant support to the USD and the pair GBP/USD can fall to the level of 1.6100 by the end of March.
Support levels: 1.6470, 1.6320, 1.6200 and 1.6100.
Resistance levels: 1.6600, 1.6660, 1.6740 and 1.6850.
In the current situation it makes sense to place pending orders to sell from the level of 1.6740 with profit taking at the level of 1.6320.
Analyst of LiteForex Group of Companies