GBP/USD: review and forecast on 21.07.2015

July 21, 2015

Current trend

Yesterday, the GBP fell to 1.5536 against the USD amid the strengthening of the American currency which hit a three-month high.

Market participants say that the Fed may soon start raising interest rates, while other central banks keep loose monetary policy.

Last Friday, US Bureau of Labor Statistics released Consumer Price Index which grew by 0.1% in annual terms. It was the first rise since December.

During his press conference, Fed’s Stanley Fischer said that Consumer Price Inflation should reach the target level of 2%. It is the only reason why US monetary authorities keep interest rates low.

The FRB of Cleveland stated last Friday that inflation may approach the target level of 2%.

The Bank of England minutes, due this Wednesday, are worth noting as they may shed light on the further UK monetary policy.

Support and resistance

Resistance levels are 1.5593 (middle MA of Bollinger Bands), 1.5627 (yesterday high) 1.5678 (15 July high), 1.5800 (psychologically important level).

Support levels are 1.5536 (yesterday low), 1.5500 (psychologically important level), 1.5450 (July 14 low), 1.5400 (psychologically important level).

Trading tips

Open short positions after the breakdown of 1.5530 with the first target at 1.5500, the second — at 1.5450 and stop-loss at 1.5550.

Open long positions from 1.5600 with targets at 1.5627 and 1.5675 and stop-loss at 1.5580.

Publication source
LiteForex information  LiteForex reviews

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