GBP/USD

GBP/USD: general review

Current trend

GBP returned to decline on Monday, updating local lows of March 13. However, by the end of the day session, the instrument managed to win back almost half of the losses, and today's trading is going upwards. Yesterday, the pound was pressured by news that House of Commons Speaker John Bercow blocked Prime Minister Theresa May’s proposal to hold a re-vote on the current version of the agreement with the EU. Bercow stated that the government could not put the same proposal to the vote twice.

Thus, May will have to ask Brussels for a longer delay, since the process of developing a new agreement will be extremely difficult. The process of postponement itself can also be very painful since this requires the unanimous decision of all EU member states. Today, investors will pay attention to the data on the UK labor market in January/February.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is expanding due to high volatility, but there're no trends in the instrument. MACD indicator tries to reverse downwards and to form a buy signal (the histogram has to consolidate below the signal line). Stochastic shows a similar trend, going down from 80. The indicator still shows a strong overbought GBP in the ultra-short term.

To open new transactions, one should wait for additional signals to appear.

Resistance levels: 1.3300, 1.3349, 1.3400.

Support levels: 1.3216, 1.3183, 1.3134, 1.3067.

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Trading tips

To open long positions, one can rely on the breakout of 1.3300. Take profit — 1.3400 or 1.3430. Stop loss – 1.3250-1.3240. Implementation period: 1-2 days.

A confident breakdown of 1.3216 or 1.3183 may serve as a signal to the return of sales with the target at 1.3067 or 1.3000. Stop loss – 1.3230-1.3270. Implementation period: 2-3 days.

 

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.3310
Take Profit 1.3400, 1.3430
Stop Loss 1.3250, 1.3240
Key Levels 1.3067, 1.3134, 1.3183, 1.3216, 1.3300, 1.3349, 1.3400

 

Alternative scenario

 

Recommendation SELL STOP
Entry Point 1.3210, 1.3175
Take Profit 1.3067, 1.3000
Stop Loss 1.3230, 1.3270
Key Levels 1.3067, 1.3134, 1.3183, 1.3216, 1.3300, 1.3349, 1.3400

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