Today Gfk released UK Consumer Confidence Index which is a leading indicator. This month it fell to +4 (vs. +5 forecast) from +7 in July.
The GBP/USD pair opened the European trading session with a drop and lost 40 points within two hours.
Next Wednesday UK Trade Balance data is released. On Thursday the Bank of England publishes its Q2 Financial Stability Report and Interest Rate Decision. Moreover, NIESR GDP Estimate for July is worth considering. The key news for Friday is US Nonfarm Payrolls statistics.
Support and resistance
The pair is near the key support levels: ЕМА200 (1.5550) and 38.2% Fibonaccci (1.5600) on the daily chart. The other strong support levels are 1.5530 (ЕМА50), 1.5485 (ЕМА144); if the pair breaks through them, it may move down to the next support level 1.5230 (23.6% Fibonacci) and further to 1.5100, 1.5000, 1.4600 (2015 lows). It is theoretically possible but rather unlikely for the price to reach 2013 lows (1.4900). The pair should trade within the following ranges: a wide one 1.5900-1.5230, a medium one 1.5775-1.5350 and a narrow one 1.5650-1.5450.
OsMA and Stochastic on the daily chart are near the zero line; on the 4-hour chart they give buy signals.
The releases, due next week, should determine the pair dynamics in the medium term.
Support levels: 1.5440, 1.5485, 1.5530, 1.5550.
Resistance levels: 1.5600, 1.5650, 1.5775.
Currently, there are no preferable trading positions for the pair.
It is possible to place Buy Stop orders at 1.5640 with targets at 1.5700, 1.5735, 1.5770 and stop-loss at 1.5590; and Sell Stop Orders at 1.5490 with targets at 1.5420, 1.5350, 1.5230 and stop-loss at 1.5560.
The pair is more likely to trade flat between 1.5700 and 1.5450 until BoE publishes its interest rate decision or Non-Farm Payroll statistics is released in the USA.