Current trend
Last week, the GBP strengthened significantly against the USD amid a decline in investor demand for the American currency and favorable labor market and retail sales statistics, released in the UK. On the contrary, the US published weak construction and key indices data. But the main driver, pushing the pair up, was the decision to keep the US interest rates unchanged at 0.25%.
On Friday, however, the demand for the USD started growing, and the pair declined slightly. Today in the morning, the pair was still under pressure.
This week, it is worth noting the publication of the US labor market statistics, GDP data for the second quarter and the speech of the Fed’s Chair Janet Yellen.
Support and resistance
Today, amid a lack of important releases, the volatility in the GBP/USD pair is expected to be low. In the medium term, the American currency is likely to strengthen.
The pair reached the upper border of the range and is expected to decline to the support level of 1.5100. Alternatively, it may trade within a narrow upward channel, breakout the key resistance level of 1.5675 and grow to local highs at 1.5815, 1.5920.
The pair reached the upper MA of Bollinger Bands, turned down and headed to the middle MA 1.5400 and further to the lower MA 1.5100.
Support levels: 1.5440, 1.5400, 1.5355, 1.5300, 1.5250, 1.5180, 1.5100.
Resistance levels: 1.5550, 1.5610, 1.5675, 1.5750, 1.5815, 1.5875, 1.5920.
Trading tips
Short positions can be opened from the levels of 1.5610, 1.5675 with targets at 1.5180, 1.5100 and stop-loss at 1.5710.
