GBP/USD: pair in correction on January 22, 2016

January 22, 2016

Current trend

Yesterday the pair strengthened a little, however, managed to renew its 2009 lows during the trading session. The pair was supported by poor data on the US labour market. The number of Initial Jobless Claims for the week ending 15 January unexpectedly grew from 283 to 293 thousands, while economists predicted a fall to 278 thousands.

Support and resistance

Bollinger Bands on the daily chart is moving down while the price range is narrowing from the bottom. MACD is growing and giving a moderate buy signal. Stochastic left the oversold zone and growing.

The indicators recommend waiting for clearer trading signals.

Support levels: 1.4200 (local low), 1.4150, 1.4079 (local low), 1.4000 (psychologically important level).

Resistance levels: 1.4248 (local high), 1.4300, 1.4351 (15 January high), 1.4450, 1.4530, 1.4600 (11 January high), 1.4662, 1.4700.

Trading tips

Long positions can be opened after the breakout of the level of 1.4300 with the target at 1.4550 and stop-loss at 1.4260. Validity – 2-3 days.

Short positions can be opened after the price rebound from the level of 1.4266 with targets at 1.4150, 1.4100 and stop-loss at 1.4300. Validity – 1-2 days.

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