2016-08-23 11:49:27

Technical performance:

Prev. closure: 1.3135; Daily range: 1.3129-1.3173;
Opening: 1.3135; 52-week range: 1.2796-1.5820;
Annual profit: -16.30%; Previous day's change (%): +0.59.

Analytical review:

  • The pound underwent a significant correction last week (over 250 points) against the USD. During yesterday's trading session, the currency pair GBP/USD held at a local support level of 1.3040 and the pound therefore continued to rally.
  • Important statistics on the UK’s economy were released last week. The volume of retail sales grew to 1.4% in July against June's 0.9% fall, according to the UK's Office for National Statistics. Analysts predicted a value of 0.2%;
  • The Commitments of Traders Report provides ambiguous data. Huge operators increased long positions by 947 contracts. Short positions were increased by 5790 contracts.
  • Technical analysis also suggests eventual correction for GBP/USD. The price exceeded a resistance level of 1.3170 on the H1 chart. The MACD histogram is in the positive zone and its volumes continue to grow.
  • A news factor is worth attention this week: publication of the UK's GDP (Friday) and FED Head Yellen's statement (Friday). These events may affect market volatility.

Summary:

  • Positive data on the UK's economy support demand for the pound. Technical analysis suggests that correction for GBP/USD may continue. According to COT report, huge operators are not definite about the pound.
  • So, we expect that the pound will consolidate against the USD in the nearest future. We advise you to search for market entry points to open long positions.

Trading tips for GBP/USD

Key levels:
Support levels: 1.3170, 1.3130, 1.3040
Resistance levels: 1.3250, 1.3290

Medium-term trading, H1
The currency has crossed a resistance level of 1.3170. Once a mirror support level of 1.3170 USD is retained and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open long positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit below the signal line. We recommend that prospective profits should be fixed partly at the levels of 1.3240, 1.3285 and 1.3350 , with Trailing Stop applied.

Medium-term trading, H1
Medium-term trading, H1

Short-term trading, M15
The currency is trading at 1.3170-1.3210. We advise you to search for market entry points once this zone is broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop order shall be placed a bit above/below the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.

Short-term trading, M15
Short-term trading, M15