At the beginning of the last week the USD had considerably weakened against the major currencies; however favourable US labor market data provided support to the American currency. Nonfarm payroll has exceeded the forecast and the pair GBP/USD fell to the key support level and the local lows of 1.5600. Last week trading session closed at the level of 1.5570. At this week opening session the pair continued to move down by inertia and is now trading at the level of 1.5550. We do not expect any important UK or US news today, which news that the pair will consolidate and high volatility is unlikely.
Levels of support and resistance
It is expected that the pair will undergo minor upward correction and then will move in the sideways channel. Next key support level is 1.5410, which is also a bottom limit of the downward channel and the local lows of August 2013. In the medium-term it is likely that the pair will go down to the target levels of 1.5410 and 1.5275.
Support levels: 1.5550, 1.5500, 1.5470, 1.5410, 1.5300 and 1.5275.
Resistance levels: 1.5600, 1.5630, 1.5670,1.5720, 1.5750, 1.5790, 1.5875 and 1.5910.
In the current situation it makes sense to open short positions with stop-loss above the level of 1.5600 and take profit at 1.5410.
Analyst of LiteForex Investments LimitedPublication source