Current trend

December started with a decline in the US Dollar that might be seen as a result of traders getting ready for important event of the week.

UK stress test of the eight major UK banks did not reveal capital inadequacies. No new measures were announced by BoE, but the Regulator is nevertheless concerned about the UK current account deficit.

While the Fed is likely to start tightening monetary policy at the upcoming meeting, a hike in the UK interest rates is postponed until the second half of 2016 due to nearly zero inflation and GDP growth.

Today, attention needs to be paid to BOE's Governor Carney speech, UK Markit Manufacturing PMI and a block of news releases from the US.

Support and resistance

The GBP/USD pair is trading within a downward channel on the daily chart, and today the price has managed to strengthen to the resistance level of 1.5110 (EMA50 on the 4-hour chart).

On the weekly and monthly charts, OsMA and Stochastic are giving sell signals. On the 4-hour chart, the indicators recommend long positions, and they are turning to long positions on the daily chart as well.

An upward correction might reach the resistance level of 1.5230 (23.6% Fibonacci and EMA50 on the daily chart).

Support levels: 1.5040, 1.5000, 1.4900.

Resistance levels: 1.5110, 1.5230, 1.5280, 1.5400.

Trading tips

Long positions can be opened above the level of 1.5140 with targets at 1.5190, 1.5240 and stop-loss at 1.5110.

Short positions can be opened if the price consolidates below the level of 1.5070 with targets at 1.5000, 1.4980 and stop-loss at 1.5100.

GBP/USD: UK Bank Stress Test

GBP/USD: UK Bank Stress Test

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