2016-07-13 11:59:42

Technical data of the currency pair:

Previous closing: 1.3246; Daily range: 1.3225-1.3337;
Opening: 1.3246; 52- week range: 1.2796-1.5820;
Annual revenue: -14.18%; Change in % for the previous day: +2.12;

Analytical review:

  • Since the beginning of this week the currency pair GBP/USD has significantly grown (over 400 points) after Brexit. During yesterday trading session the GBP rose by 2%;
  • US statistics released last week showed that 287000 new jobs were created outside agricultural sector in June, which exceeded the forecast of 175000. However, unemployment rate rose only to 4.9% against the previous value of 4.7%;
  • Technical analysis shows possibility of the correction. On the 4-hour chart the indicators show reversal pattern - price divergence and MACD histogram;
  • “Commitments of Traders” shows ambiguous picture. Large investors have increased the number of long positions by 19814 contracts. Short positions have also grown by 12054 contracts;
  • The news of this week will include interest rate decision by the Bank of England (Thursday), US core consumer price index (Friday). This data can affect market volatility and movement direction in the pair.

Summary:

  • Stabilization of the political situation in the UK and ambiguous US macro-economic data support demand for the Pound. Technical analysis shows that upward correction will continue. According to “COT” large investors do not have common opinion about the GBP.
  • Therefore, correction in the pair is likely to continue. It is advisable to open long positions.

Trading tips for the currency pair GBP/USD

Key levels:
Support levels: 1.3130 and 1.2850.
Resistance level: 1.3495.

Medium-term trading, H4
Currently, the currency has exceeded and consolidated above resistance level of 1.3130. If the price maintains demand zone of 1.3230-1.3295 and in case of the respective (such as Price Action pattern), we recommend to open long positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 1.3400, 1.3490 and 1.3650 with the use of trailing stops.

Medium-term trading, H4
Medium-term trading, H4

Short-term trading, М15
The currency is traded in the range of 1.3255-1.3325. It is recommended to enter the market after breaking out and testing of this zone. Positions shall be opened towards the signal line and the nearest support/resistance level. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stops.

Short-term trading, М15
Short-term trading, М15