Current trend
The Pound continues to trade in the downward channel. Last week the GBP had broken support level in the form of moving average with the period 200. If the near future the Pound does not regain losses, the decline will continue to the level of 1.6350. Meanwhile, in the British real estate market another “bubble” is brewing up, which may cause long-term slowdown of economic recovery in the country. The prices continue to grow, while the number of buyers is decreasing. According to national statistics, average price for a house has risen by 1.6% or 16% on annual basis. Some politicians insist on necessity to structural reforms aimed at tightening the rules of issuing mortgage loans. Some important news reflecting the state of British economy will be released this week. On Friday GDP for Q4 last year will become known as well as payment balance, which is expected to fall to the level of 14 billion pounds, supporting national economy.
Levels of support and resistance
The nearest resistance level is the moving average with the period of 200 (1.6507). Support level is the lower limit of the trading channel (1.6455).
Trading tips
It is advisable to open short positions after breakdown of the level of 1.6455 with protective orders at 1.6470 and a target of 1.6380.
Dmitry Agurbash,
Analyst of LiteForex Group of Companies
