Due to U.S. Independence Day and the forthcoming referendum in Greece, the market stays calm today. But yesterday, when the NFPR statistics was released, the GBP/USD pair fluctuated widely within 75 points. But, on the whole, the day finished where it had started, at 1.5615. Today, the pair stays flat within 20 points and the day is likely to end near the opening level 1.5609.
At 11:30 a.m. (GMT +3) Services PMI for June is released in the UK and it may cause some volatility.
Support and resistance
The pair is within MA lines on the daily chart EMA200 (1.5560), the 4-hour chart EMA144 (1.5615), EMA200 (1.5565), and the 38.2% Fibonacci (1.5600) correction to the decline from 1.7200 to 1.4600 (2015 low). Currently, the pair is gaining back in the ascending channel (green) but remains within 1.5600 (38.2% Fibonacci) and 1.5900 (50% Fibonacci). A breakthrough in either direction would determine the movement in the medium term.
On the weekly chart, the pair growth is limited by the strong resistance levels 1.5970 (the top line of the ascending channel), 1.5945 (EMA200), 1.5900 (50% Fibonacci), 1.5865 (EMA144). Should these levels be overcome, the pair may reach 1.6200 (61.8% Fibonacci), 1.6300, 1.6700, 1.7170 (2014 highs and the level where the decline started). After the breakdown and consolidation below 1.5600 (38.2% Fibonacci), 1.5560 (EMA200 on the daily chart) and 1.5470 (EMA144), the pair may continue to fall, first to 1.5230 (23.6% Fibonacci level) and then to 1.5100, 1.5000, 1.4600 (2015 lows). The latter scenario is supported by the situation in Greece, which may be the first sign of the looming crisis in the EU, and the Fed's policy, aimed at strengthening the U.S. currency. The Bank of England, in turn, may begin to weaken the pound to support the UK economy amid the European crisis.
On the daily chart, OsMA and Stochastic indicators are in the sell zone, on the 4-hour chart - in the neutral zone.
Support levels: 1.5470, 1.5560, 1.5600.
Resistance levels: 1.5800, 1.5865, 1.5900.
Given the indicators, the pound may fall to the support levels 1.5600, 1.5560, 1.5470. Open short positions with stop loss at 1.5750.
After the breakout of 1.5800, consider alternative long positions as the price may go up to the level 1.5900 and further to 1.6200.
However, the pair is likely to remain will flat until Monday. Monday may open with a gap due to the referendum results in Greece. Therefore, it is better to stay out of the market today.