On Wednesday the pair strengthened on the positive data on British labour market. According to ILO estimates, unemployment rate fell by 0.2%. The pair went up, reaching resistance level of 1.6400. However, following the announcement of the US Fed’s decision on monetary policy, volatility in the GBP/USD was high and the pair traded in the range of 1.6480-1.6340; however the Pound finally gave way to the USD and the pair went down.
Today, British Pound has declined and reached the level of 1.6320. However, the currency does not wish to lose positions and trend may change after the publication of the following fundamental data from the UK: external surplus, GDP for Q3 and net borrowings of the public sector. Economic growth in the UK is accelerating and on Wednesday the rating agency Fitch has confirmed the level of AA+ for the UK.
Support and resistance
If British statistics is positive, the pair will continue to trade in the sideways channel, testing recent highs. Otherwise, support level of 1.6320 will be broken down and the pair will go to 1.6200 and 1.6100.
Support levels: 1.6320, 1.6260, 1.6200 and 1.6100.
Resistance levels: 1.6400, 1.6430 and 1.6465.
In the current situation it makes sense to place short positions with profit taking at the levels of 1.6200-1.6100.
Analyst of LiteForex Group of Companies