Analytical Review of the Currency Pair GBP/USD

Analytical Review of the Currency Pair GBP/USD

30 March 2016, 13:08
Roberto Jacobs
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Analytical Review of the Currency Pair GBP/USD

Technical data of the currency pair:

Previous closing: 1.4385;
Daily range: 1.4369-1.4434;
Opening: 1.4385;
52-week range: 1.3833-1.5930;
Annual profit: -2.87%;
Change in % for the previous day: +0.88.

Analytical review:

  • Over the past four sessions the Pound has significantly strengthened against the USD (over 300 points). During yesterday’s session the GBP rose in price by 0.88%.
  • US statistics released yesterday showed that consumer confidence index rose by 2.2 up to 96.2 against the forecast of 94.0.
  • At yesterday’s conference the head of the US Fed Janet Yellen said that risks to the global economy should not put pressure on the USA. However, Mrs. Yellen said also said that they should be careful at making decision to rise interest rate.
  • “Commitments of Traders” showed that long positions have increased by 17490 contracts up to 200436 contracts. Short positions have been decreased by 3194 contracts.
  • This week, some US economic news will become known, which may affect the market. On Friday 1 April, non-farm payrolls will be released.


Summary:

  • Despite positive US statistics, the USD is declining against the major currencies. Ambiguous situation in the world economy and high volatility in the financial markets put pressure on the pair GBP/USD. According to “COT” large speculators have significantly increased the number of long positions.
  • It is expected that the Pound will rise against the USD. We recommend to open long positions.


Trading tips for the currency pair GBP/USD

Long-term trading: prior to the release of non-farm payrolls on Friday April 1 апреля, we do not expect significant changes in the exchange rate of British Pound. At the moment we recommend to refrain from long-term trades on the currency pair GBP/USD. It is advisable to enter the market after the release of the US statistics on Friday and re-testing of the key support and resistance levels and in case of the respective confirmations (such as the pattern Price Action).


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Short-term trading: at the moment on the chart with the timeframe 15М the currency has broken out and consolidated above the local resistance level of 1.4400. After testing and maintaining the zone of demand of 1.4370-1.4400 it will be advisable to open long positions. Risk per trade is not more than 3% of capital. Stop order can be placed slightly below the signal line. Take profit is recommended in parts at the levels of 1.4460, 1.4490 and 1.4530 with the use of trailing stop.


The material has been provided by LiteForex - Finance Services Company - www.liteforex.com


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