Current trend
On Monday quotes of the currency pair GBP/USD had corrected after the decline of last week, growing by 60 points. The pair broke down the level of 1.6633, which coincides with the upper limit of Bollinger bands indicator, indicating reversal in the near future and continuation of the downward movement.
The data on British industrial production output in February will become known today. It is expected that this index, incorporating the volume of produced products, mining and utilities, will increase by 0.3%, providing support to the British currency . On the other hand, corporate reporting will start in the USA today. Aluminum giant Alcoa will be the first to submit the results. Positive reporting data will support the USD.
Support and resistance
In the nearest future the pair can continue to rise to the levels of 1.6646 and 16662. However, the rise will be followed by a reversal and gradual decline in price to the level of 1.6597 (middle line of Bollinger bands). Technical indicators show that the pair will continue to grow. MACD histogram is ready to move to the positive zone and form a buy signal. Stochastic lines has come to the overbought zone, forming a similar signal.
Resistance levels: 1.6646, 1.6662 and 1.6680.
Support levels: 1.6597, 1.6560 and 1.6539.
Trading tips
In the current situation it is recommended to open short positions from the level of 1.6633 with profit taking at 1.6597. Pending sell orders can be placed at the levels of 1.6646 and 1.6662.
Dmitry Zolotov
Analyst of LiteForex Group of Companies
