Current trend

The British pound moved to correction against the US dollar after a significant decline in early July.

The pair reached a key support level of 1.2950, which is the lower border of the broad downward channel, fended off it and went up. Yesterday the momentum slowed down and USD regained some positions, but today the instrument began to grow again. The formation of an upward correction is caused by a decrease in demand for the dollar due to the fixation of short positions at local minima. This is also caused by the technical situation for the pair.

The main catalysts that can significantly affect the trend may be US releases on the growth rate in Q2, orders for durable goods, and the labor market.

Support and resistance

In the short term, the pair may continue to grow with targets at 1.3205, 1.3245, but is unlikely to overcome key resistance levels. The UK economy has slowed, as evidenced by recent data on major sectors of it. At the same time, the dollar recently has significant investment support and is likely to grow again after a slight decrease in interest. In this situation, it is possible to expect the appearance of new lows for the pair by the end of the summer.

Technical indicators on D1 chart and above confirm the forecast: MACD shows the preservation of the high volume of short positions, and Bollinger Bands are pointing downwards.

Support levels: 1.3110, 1.3050, 1.3000, 1.2975, 1.2950, 1.2930, 1.2870, 1.2830.

Resistance levels: 1.3150, 1.3180, 1.3205, 1.3245, 1.3270, 1.3295, 1.3350, 1.3380.

Trading tips

Short positions may be opened from the current level; pending orders can be opened from the levels of 1.3180, 1.3205 with targets at 1.2930, 1.2850 and the stop loss at 1.3290.

Great Britan vs US Dollar

BuySellSpread
1.322841.3226123

Scenario

TimeframeWeekly
RecommendationsSELL
Entry Point1.3131
Take Profit1.2930, 1.2850
Stop Loss1.3290
Support levels1.2830, 1.2870, 1.2930, 1.2950, 1.2975, 1.3000, 1.3050, 1.3110, 1.3150, 1.3180, 1.3205, 1.3245, 1.3270, 1.3295, 1.3350, 1.3380

Alternative scenario

RecommendationsSELL LIMIT
Entry Point1.3180, 1.3205
Take Profit1.2930, 1.2850
Stop Loss1.3290
Support levels1.2830, 1.2870, 1.2930, 1.2950, 1.2975, 1.3000, 1.3050, 1.3110, 1.3150, 1.3180, 1.3205, 1.3245, 1.3270, 1.3295, 1.3350, 1.3380
GBP/USD: short positions are the priority

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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