Current trend

During yesterday’s trades the USD had slightly regained positions versus the British currency after a week of losses. The pair GBP/USD fell to the level of 1.5637. The decline was caused by the regain of the trust to the USD among investors. In addition, On Monday the American currency rose against the major currency basket as market participants focused attention on the forthcoming inflation data on Friday and the minutes of the US Fed meeting, which will be released on Wednesday.

Last week the Pound has grown almost to the highest level over six months due the comments by Mr. Carney, the head of the Bank of England who said that interest rates can be raised this year. To the question from BBC radio whether the interest rates would become higher at same time next year, he reply was: “It is possible, but all depends on the economic development”.

Today, British inflation data will become known. Analysts believe that consumer price index will rise from 0.2% to 0.4% on monthly basis. On the annual basis the price will remain unchanged. The pair will get support if the forecast proves to be correct.  Otherwise, the pair will undergo correction.

Support and resistance

Resistance levels: 1.5745 (yesterday’s highs), 1.5814 (highs of 14 May), 1.5900 (moving average with the period 200), 1.6000 (psychologically important level).

Support levels: 1.5631 (Asian session lows), 1.5520 (Fibonacci retracement of 23.6%), 1.5340 (Fibonacci retracement of 38.2%), 1.5190 (Fibonacci retracement of 50%).

Trading tips

Buy positions can be opened after breakdown of the level of 1.5750 with the first target of   1.5810 and the next one at 1.5900. Short positions are advisable from the level of 1.5630 with the targets of 1.5520 and 1.5350. 

GBP/USD: analysis and forecast

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