On Friday, the GBP strengthened against the USD and reached 1.5549. Investors’ confidence came from hopes on the agreement between Greece and its creditors and from the rebound of the Chinese stock markets.
Sharp growth of the Chinese stock markets was determined by the measures of the government that forbade stocks sales for investors with five or more percent stake in blue chip companies. The government also launched an investigation into stock market manipulations.
The pair found a support in the latest data from the UK where the Trade Balance deficit in May fell from 9.39 billion to 8 billion pounds (forecasted 9.7 billion pounds).
The Greek situation is going to remain central for this week.
Support and resistance
Resistance levels: 1.5449 (yesterday high, 38.2% Fibonacci), 1.5630 (50% Fibonacci), 1.5700 (psychologically important level, 61.8% Fibonacci), 1.5800 (psychologically important level).
Support levels: 1.5466 (local low on the 1-hour chart), 1.5400 (psychologically important level), 1.5329 (lower MA of Bollinger Bands, 8 July low), 1.5257 (9 June low), 1.5173 (1 June and 5 May lows).
Open short positions after the breakdown of the level of 1.5460 with targets at 1.5400, 1.5330 and stop-loss at 1.5500.
Long positions can be opened from 1.5555 with targets at 1.5630, 1.5700 and stop-loss at 1.5500.