Current trend
Last week the Pound strengthened positions, finishing last trading session of the week at the level of 1.6748. Today, the pair GBP/USD continues to grow reaching four-year highs at the level of 1.6822. The rise was provoked by several macro-economic facts. First of all, the Bank of England raised forecast of country’ economic growth for this year; secondly, monetary authorities specified the period to raise interest rates, which will be Q2 2015. The pair GBP/USD и was also supported by the weakening USD. Investors were disappointed by the US data released on Thursday and Friday. It became known that number of applications for unemployment benefits increased to 339 thousand. Negative statistics can force US Fed to revise the dates to curtail incentive programs.
Levels of support and resistance
The nearest resistance level is psychologically important level of 1.6800, which will be followed by the local highs of 1.6822. The main target of the “bulls” is the level of 1.6874. Support levels are 1.6748 (Friday’s highs), 1.6685 (Fibonacci retracement line 23.6%), and 1.6600 (у Fibonacci retracement line 38.2%.
Tradingtips
It is recommended to open short positions after breakdown of the level of 1.6748 with stop-loss at 1.6770 and a target of 1.6685.
Andrey Cherkas
Analyst of LiteForex Group of Companies
