The pair GBP/USD is still in the sideways channel. Yesterday the “bulls” tried to overcome the level of 1.6715. Market participants were eager to risk and sell USD. Following publication of negative business activity index in the British construction sector the Pound has lost almost all gained positions, dropping to 1.6650.
British PMI in the service sector will become known today as well as forecast of employment in the USA, estimated by Automatic Data Processing and the data on business activity index in the US service sector by Markit.
Levels of support and resistance
The nearest resistance levels: 1.6715 (yesterday’s highs), 1.6768 (highs of 28 February), 1.6822 (highs of 17 February and four-year highs). Support levels: 1.6639 (yesterday’s lows), 1.6600 (38.2% Fibonacci), 1.6535 (50.0% Fibonacci).
Today movement in the pair will depend on the US and UK statistics. Short positions can be placed below the level of 1.6639. Long positions can be opened above 1.6715. It also makes sense to place limit sell orders at the level of 1.6800. Another important factor is foreign policy problems especially situation in Ukraine. The fact that probability of military confrontation is decreasing can boost investors’ interest to the risky assets, which will have a positive impact on quotes of the Pound. Escalation of conflict can lead to the opposite reaction of market participants.
Analyst of LiteForex Group of Companies