GBP/USD: review and forecast on 08.07.2015

July 8, 2015

Current trend

Yesterday, the pair GBP/USD fell by nearly 200 points and reached 1.5413. This was a result of the Eurozone situation.

The pair fell despite generally positive data on industrial production in the UK that came out yesterday. In May, Industrial Production grew by 0.4% while was forecasted to fall by 0.2%, and grew by 2.1% against the previous year, while was forecasted to grow by 1.6%. However, Manufacturing Production fell by 0.6% in May (forecasted 0.1% growth) and grew by 1% against the previous year instead of 1.8% forecasted growth.

It is hard to make good predictions until the next EU summit that is planned for 12 July. Today, Athens should present their new proposals to creditors.

Today, the Budget Report is due in the UK that is going to present economic forecast for the next year. Should the forecast be negative, the GBP is likely to continue falling.

Support and resistance

Resistance levels: 1.5465 (Asian session high), 1.5527 (trend line), 1.5608 (yesterday high), 1.5670 (middle MA of Bollinger Bands), 1.5800 (psychologically important level).

Support levels: 1.5413 (yesterday low, bottom MA of Bollinger Bands), 1.5368 (10 June low), 1.5300 (psychologically important level), 1.5173 (1 June low).

Trading tips

Open long positions after the breakout of the level of 1.5470 with targets at 1.5525, 1.5600 and stop-loss at 1.5430. Short positions can be opened at 1.5405 with targets at 1.5365, 1.5300 and stop-loss at 1.5440.

Publication source
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