The pair GBP/USD grew up at the beginning of this week, reaching the four-week highs of 1.6153. However disappointing data on European payment balance has corrected the Pound downward. At the moment the pair is trading in the narrow range of thirty points (1.6095-1.6125). Investors are waiting for the publication of economic sentiment indices in business sectors of Germany and EU. According to preliminary estimates the indices can rise up to the level of 54.0 and 63.1 points respectively, which will put significant pressure on the American dollar.
Support and resistance
Currently the pair is trading near the medium line of “Bollinger bands” indicator (1.6090). In the near future the price may go up to the level of 1.6150 (upper moving average of “Bollinger bands”) and probably to 1.6190. If ZEW index disappoints investors, the pair will break down support level of 1.6090 and fall to 1.6020.
On the four-hour chart technical indicators give mixed signals. Bollinger bands are directed upward. Stochastic lines are crossing. They are directed upward, giving a buy signal. MACD histogram is still in the positive zone; however its volumes are decreasing.
In the current circumstances it makes sense to open long positions with profit taking at the level of 1.6150. It also advisable to place pending sell orders at the levels of 1.6150 and 1.6190
Analyst of LiteForex Group of Companies