Current trend
Following significant decline last week, the pair unsuccessfully tried to regain positions and overcome the level of 1.6900. Yesterday poor US fundamental data has made the matters worse and the pair GBP/USD fell to the level of 1.6824, which coincides with Fibonacci line of 61.8% and is the last constraining factor.
Today, investors’ attention will be focused on inflation report of the Bank of England, which is issued quarterly. Based on this document, the Bank of England makes decisions on inflation rate and makes assessment of inflation prospects in the UK for the next two years. It is likely that the regulator will raise the forecast of economic growth, which will help to restore the demand for the currency. In addition, the data on British labour market will become known today. If the data proves that positive predictions were correct, the pair GBP/USD can significantly grow.
Support and resistance
The nearest support level is 1.6842, which will be followed by the main target of the “bears” at the level of 1.6830. Resistance levels: 1.6860, 1.6880, 1.6900 and 1.6920.
Trading tips
It makes sense to open long positions above the level of 1.6900 with the target of 1.6975. Sell positions can be opened below the level of 1.6820.
Ilya Lashenko
LiteForex Investments Limited Analyst
