On Thursday the currency pair GBP/USD weakened and reached weekly lows of 1.6296. In his yesterday’s speech before the Parliament, British Finance Minister George Osborne said that economic redevelopment has not been completed yet. He nevertheless raised GDP growth forecast to 1.4% for this year and to 2.4% for the next year. However, investors did not share optimism of the Minister and the Pound continued to decline. On the other hand, the USD was supported by positive statistics. According to preliminary data, US GDP can amount to 3.6%, which is higher than the forecast by 0.6%
Support and resistance
At the moment the pair is trading at the level of 1.6330. It is not expected that it will go below the level 1.6300 in the near future. Investors will not take risk before the news from American labour market will become known. However, if the number of new jobs outside agricultural sector rises again, quotes can fall to the levels of 1.6280 and 1.6230 or even up to 1.6290.
On the four-hour chart technical indicators give mixed signals. Bollinger bands are directed downward; bottom line of the indicator provides support to the price chart. MACD histogram has moved to the negative zone, forming a sell signal. Stochastic lines, on the contrary, are rising.
In the current situation it makes sense to open short positions from the level of 1.6300 with the target of 1.6230. If the price reaches the level of 1.5360, it is advisable to open long positions with the target of 1.6430
Analyst of LiteForex Group of Companies