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GBP/USD: general analysis

LiteForex

Current trend

Yesterday the pair GBP/USD traded in the sideways channel. Despite the meeting of the Bank of England devoted to monetary policy, yesterday was the neutral day for both “bulls” and “bears”. Yesterday’s moderate dynamics can be explained by regulator’s decision to leave interest rate at the level of 0.5% and not to change volume of asset purchase program, which has been predicted. According to statement by the head of the Bank of England Mark Carrney last August, interest rates can be reviewed only in case unemployment rate decreases to 7%.

Today, the data on British industrial production and industrial output in manufacturing sector will be released, as well as trade balance. It is expected that indices will slightly go up, which is unlikely to affect exchange rate of the pair GBP/USD. The main event of Friday is the US labour market statistics; according to forecast number of new jobs outside agricultural sector may double against previous period from 74 000 to 185 000. This data can give significant support to the American dollar, which has already rose against its counterparts.

Supportandresistance

Resistance levels are 1.6352 (Fibonacci retracement of 23.6%, moving average with the period 55), 1.6413 (moving average with the period 21, у Fibonacci retracement of 38.2%), 1.6460 (Fibonacci retracement of 50%).Support levels are 1.6251 (February lows), 1.6217 (moving average with the period 100) and 1.6100 (important psychological level).

Trading tips

On the daily chart MACD histogram is in the negative zone; its volumes are increasing, forming a sell signal. Stochastic lines are intersecting in the oversold zone, giving a buy signal. Given positive dynamics of the American currency it is recommended to place sell orders after breakdown of the level of 1.6251 with short-term target of 1.6217. Pending sell orders with the target of 1.6100 can be placed below the level of 1.6215

Andrey Cherkas

Analyst of LiteForex Group of Companies

Source: https://www.liteforex.com/
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