On Monday, the GBP/USD pair remained in the area of its lowest levels since May 2010. The British Pound is getting no support from UK macroeconomic data and amid loose monetary policy of the Bank of England.
The US Dollar, in its turn, did not manage to strengthen as US financial markets were closed on Monday for the Martin Luther King Jr. holiday. The US currency gained only slight support from China’s news. The People's Bank of China announced new measures to curb speculative Yuan selling.
Support and resistance
Bollinger bands indicator on the daily chart is directed down. The price range remains wide enough for the pair to decline towards 1.4150. At the same time, a possibility of an upward correction should be considered.
MACD is declining and keeping a sell signal. Stochastic has not left the oversold zone for a long time.
It is recommended to wait for clearer trading signals.
Support levels: 1.4236 (18 January low), 1.4200 (important psychological barrier), 1.4150, 1.4100, 1.4000.
Resistance levels: 1.4300, 1.4351 (12 January low), 1.4450, 1.4530, 1.4600 (near 11 January high), 1.4662, 1.4700, 1.4730, 1.4800.
Short positions can be opened from the current level with the target at 1.4200 and stop-loss at 1.4350. Validity – 1-2 days.
Long positions can be opened after the breakout of the level of 1.4360 with targets at 1.4450, 1.4500 and stop-loss at 1.4300. Validity – 2-3 days.