GBP/USD: review and movement forecast

1 May, 2015

Current trend
At the last trading session the Pound has slightly dropped against the USD. Due to lack of important macro-economic statistics and prolonged rise in the pair, investors decided to take profit and close long positions. Therefore, yesterday’s decline was of technical nature. Additional pressure on the pair was caused by positive data on applications for unemployment benefits in the USA. Their number amounted to 262 thousand, which was significantly less than expectations of 290 thousand.
Today’s economic calendar is not very eventful. Nevertheless, in the afternoon, business activity index in the U.S. manufacturing sector ISM for April will become known

Support and resistance
On the four-hour chart Bollinger bands demonstrate convergence, confirming that the existing downtrend will continue. MACD histogram is in the positive zone; its volumes are rapidly decreasing, which suggests that sellers’ influence is increasing.

Resistance levels: 1.5360, 1.5400, 1.5440 and 1.5490.
Support levels: 1.5300, 1.5270, 1.5215 and 1.5170.

Trading tips
If the existing trend continues, it is recommended to open sell positions from the current levels with the nearest target of 1.5270. Breakdown of the level of 1.5270 will enable movement in price up to the level of 1.5215. Upward movement can continue only after consolidation of the price above the level of 1.5400. In such circumstances the “bulls” will try to bring the pair back to the highs of the past week at the level of 1.5500.

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