GBP/USD

GBP/USD: the instrument trades ambiguously

Current trend. Yesterday, the GBP/USD pair fell slightly, continuing the development of the “bearish” impulse formed the day before.

British investors are focused on Brexit. Prime Minister Theresa May met with European Commission President Jean-Claude Juncker to discuss preparations for the EU Brexit summit on Sunday. At the summit, the parties will work out the dissatisfaction of a part of the EU members with significant preferences to British fishing companies, as well as Spain’s complaints about Gibraltar.

GBP is under pressure of October UK government borrowing data, which increased significantly by 7.96B pounds.

However, the speech of the head of the Bank of England Mark Carney, who supported May’s Brexit proposals, affected GBP positively. Carney stressed the importance of a long transition period because, without it, the British economy could face significant difficulties.

Support and resistance

On the daily chart, Bollinger bands are falling. The price range is actively widening from below, letting the “bears” renew local lows. MACD is falling, keeping a moderate sell signal (the histogram is below the signal line). Stochastic is directed downwards but is close to its lows, which reflects that GBP can become oversold soon.

It is better to keep current short positions until the situation is clarified.

Resistance levels: 1.2826, 1.2882, 1.2920, 1.2950.

Support levels: 1.2763, 1.2722, 1.2693.

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Trading tips

Long positions can be opened after the rebound from the level of 1.2763 and the breakout of the level of 1.2826 with the targets at 1.2920–1.2950. Stop loss is 1.2790–1.2780. Implementation period: 2–3 days.

Short positions can be opened after the breakdown of the level of 1.2763 with the targets at 1.2693–1.2675. Stop loss is 1.2800. Implementation period: 1–2 days.

 

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.2830
Take Profit 1.2920, 1.2950
Stop Loss 1.2790, 1.2780
Key Levels 1.2693, 1.2722, 1.2763, 1.2826, 1.2882, 1.2920, 1.2950

 

Alternative scenario

 

Recommendation SELL STOP
Entry Point 1.2760
Take Profit 1.2693, 1.2675
Stop Loss 1.2800
Key Levels 1.2693, 1.2722, 1.2763, 1.2826, 1.2882, 1.2920, 1.2950

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