GBP/USD: UK or US to hike interest rates first?

July 16, 2015

Current trend

The GBP/USD pair is trading within the upward channel for the second week. The GBP was supported by the statement of the head of the Bank of England, Mark Carney who stated that the time of interest rates increase is coming up regardless of the low inflation rate. In June, the Consumer Price index in the UK fell to zero but is expected to grow towards the end of the year.

Generally, experts do not expect an interest rates increase in the UK earlier than 2016. At the same time, in the US the interest rate hike may happen later this year if the inflation rate reaches its 2% target. After the most recent statements by Janet Yellen regarding a high possibility of interest rates increase this year, the GBP stopped growing against the USD and gradual correction in the pair began.

Support and resistance

The price reached the upper border of the upward channel and 50% Fibonacci arc, which is the resistance level. The price is now testing the level of 1.5615 (50% Fibonacci), the consolidation below which would allow it to fall to 1.5550 (38.2% Fibonacci) and, possibly 1.5470 (23.6% Fibonacci). However, if the price breaks out the 50% arc and consolidates above 1.5640, it is likely to grow towards 1.5685 (61.8% Fibonacci) and 1.5755.

Support levels: 1.5615, 1.5550, 1.5470.

Resistance levels: 1.5640, 1.5685, 1.5755.

Trading tips

Open short positions from 1.5600 with targets at 1.5550, 1.5470 and stop-loss at 1.5635.

Long positions can be opened after the breakout of the level of 1.5640 with targets at 1.5685, 1.5755 and stop-loss at 1.5600.

Publication source
LiteForex information  LiteForex reviews

September 28, 2016
US presidential debate moves unwind
The market’s initial response to the US presidential election debate overnight was a clear sigh of relief. The Mexican Peso, which had hit a record low against the dollar just the day before, surged higher, as too did the Canadian dollar...
September 27, 2016
Markets start last week of September on the back foot
It hasn't been a great start for global equities in this last week of September, with European indices dropping between 1.0 to 1.5 per cent during Monday’s morning session, mirroring a similar performance in Chinese and Japanese markets overnight...
September 23, 2016
Gold rises to critical level on lower-for-longer policy signals
The price of gold extended its rebound modestly on Thursday after the US Federal Reserve provided some key signals on Wednesday that, despite a considerable probability of one Fed rate hike by the end of this year...

HYCM Rating
Fort Financial Services Rating
FXCM Rating
Tickmill Rating
Orbex Rating
Larson&Holz IT Ltd Rating

OptionFair Rating
OptionRally Rating
OptionTrade Rating
OptionBit Rating
Empire Option Rating
IQ Option Rating