On Monday, the GBP was strengthening against the USD amid favorable Mortgage Approvals statistics, released in the UK, and expectations of the GDP report, due on Tuesday.
The pair also gained support from the weakness of the American currency, which was under pressure from New Home Sales indicator, which shrank by 11.5% in September after a 5.2% growth in the previous month, while just a 0.4% decline was expected. Moreover, Dallas Fed Manufacturing Business Index declined from -9.5 to -12.7 points, which is also below the forecasts.
Support and resistance
Bollinger Bands indicator on the daily chart is directed horizontally again. MACD still keeps a downward trend. Stochastic is in the oversold zone and trying to turn up.
It is recommended to wait for clearer trading signals.
Support levels: 1.5328, 1.5300, 1.5260, 1.5200 (13 October low), 1.5164, 1.5125, 1.5100.
Resistance levels: 1.5400, 1.5440, 1.5475, 1.5508 (15 October high), 1.5528 (22 September high), 1.5558, 1.5600, 1.5658 (18 September high).
When the price breaks out and consolidates above the level of 1.5375, long positions can be opened with targets at 1.5450, 1.5500 and stop-loss at 1.5340. Validity - 1-2 days.
Short positions can be opened after the breakdown of the level of 1.5300 with the target at 1.5220 and stop-loss at 1.5330. Validity - 1-3 days.