During the last 2 days, the pair GBP/USD fell by more than 150 points to the level of 1.5600. However, investors may soon get interested in the pair again and that would lead to its volatility increase.
A prerequisite to it is the richness of today’s economic calendar. PMI Construction data in the UK is due at 11:30 am (GMT +3) and if the figure matches its forecasts that would strengthen the GBP. Latest data from the US Department of Labor is due at 3:30 pm (GMT +3) and the forecasts are rather negative for the USD.
Thus, the likeliest direction of the pair is upwards.
Support and resistance
On the chart, the Bollinger bands are widening. Yesterday the pair was trading below the lower band but returned inside since and is now trading above the bottom MA. The picture can be interpreted as the formation of the upward trend before long, which is supported by the fundamental analysis.
The nearest resistance level is at 1.5690 (middle MA of Bollinger Bands).
Support level: 1.5590 (bottom MA of Bollinger Bands).
Open long positions above 1.5620 and switch trailing stop on after 1.5690. Opposite movement is unlikely today and thus is not considered.