GBP/USD: up or down?

November 12, 2013

Current trend

The pair GBP/USD has been falling since the beginning of the week due to the ECB decision to lower interest rate down to the level of 0.25%. This Monday the price tested key level of 1.5965 (61.8% of Fibonacci lines). If the level is broken through, the pair will go further down to the levels of 1.5920 and 1.5880.

Today's fundamental data from Great Britain may affect the movement of the price. According to the forecasts, Core CPI may decrease to the level of 2%, leading to the POund fall down to the levels 1.6020 and 1.6040 (middle MA of the Bollinger Bands indicator).

Support and resistance

On the four-hour chart technical indicators confirm the possibility of the fall. Bollinger Bands are directed downwards, Stochastic lines have crossed and are also directed downwards. MACD histogram has crossed zero line from above, its volumes are increasing.

Support levels: 1.6965, 1.5920, 1.5880.

Resistance levels: 1.6020, 1.6040.

Trading tips

Regarding the situation it is recomended to open short trades with targets at 1.5880 after the breakdown of the 1.5965 level. Pending buy orders can be placed above the level 1.5985.

Dmitriy Zolotov

Analyst of LiteForex Group of Companies

Publication source
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