GBP/USD: long correction is highly probable

January 6, 2014

Current trend

The year has started with Dollar’s strengthening. The pair GBP/USD went down after the release of negative stats from UK. PMI Manufacturing dropped down to the level of 57.3 point last week, and the pair has lost 200 points since. Today UK PMI Services will be published as well as US Non-Manufacturing PMI. If Britain index stays true to the positive forecasts, the pair GBP/USD will be corrected upwards, otherwise, Bearish movement will go on.

In mid-term scenario we expect the trend to reverse to the descending one. The assumption is justified by several factors. First of all, US economy showed great growth in 4th quarter of 2013. Secondly, demand of US Dollar is growing, because the Pound is overbought. At last, negative macroeconomic data from UK affect British currency.

Support and resistance

The pair is going to reach support at the 50% Fibonacci retracement (1.5750). Additional support levels are 1.6320, 1.6200, 1.6100 and 1.5860. Resistance levels will be at 1.6450, 1.6540, 1.6600 and 1.6740.

Trading tips

Short positions can be opened at current price with targets around 1.6000-1.5860. Pending sell orders should be placed at 1.6450 with take-profits at 1.6100.

 

Dmitriy Likhachev

Analyst of LiteForex Group of Companies

Publication source
LiteForex information  LiteForex reviews

February 17, 2017
Golds rally may falter
The gold price has racked up its 2nd straight day of gains today on the back of US dollar weakness and doubts over an interest rate hike next month from the US Federal Reserve...
February 16, 2017
Where is black gold heading?
The Euro is slowly going down and this is not brought on by the Eurozone situation. Instead, this is fueled by the U.S. Dollar. Yesterday, Janet Yellen gave a speech in the Senate Banking Committee emphasising the fact that it Is not quite right to use the wait-and-see stance regarding the interest rate hike...
February 14, 2017
Will France exit the euro?
The Euro has come under pressure late in the European session today, after analysts warned of the huge costs that France would face should they decide to ditch the European currency...

NPBFX Rating
Grand Capital Rating
FX Giants Rating
XM Rating
FOREX.com Rating
EXNESS Rating

OptionBit Rating
IQ Option Rating
EZTrader Rating
TopOption Rating
Anyoption Rating
UKoptions Rating