Review and dynamics
Yesterday, High court in London made a ruling that the government could start negotiations on the withdrawal from the EU only with the Parliament’ approval. The pair GBP/USD has soared to the level of 1.2495. Today the pair GBP/USD can go up to the level of 1.2640 due the strong positive momentum, especially if the US labor market, which will become known at 15:30 GMT+3), will be weak.
UK GDP for Q3 has exceeded expectations. As it became known earlier, British GDP has grown by 0.5% against the forecast of +0.3% and by 2.3% against the forecast +2.1% compared to the same period last year. The Pound has grown in the currency market and in the early European session the pair GBP/USD reached resistance level of 1.2475 (ЕМА200 on 4-hour chart).
Following significant decline at the beginning of last month, the pair GBP/USD has been rising since the beginning of this month rebounding from support level of 1.2120.
The pair has broken out resistance level of 1.2400 (ЕМА144 on 4-hour chart); but failed to exceed resistance level of 1.2475 yesterday.
On 4- hour, daily and weekly charts the indicators OsMA and Stochastic give signals for long positions.
If the pair breaks out resistance level of 1.2475, the price may rise up to the resistance level of 1.2640 (ЕМА50 on the daily chart). Breakout of this level may trigger further rise up to the levels of 1.2795 and 1.2875. Further rise is unlikely.
On the weekly chart the pair GBP/USD is in a descending channel with the lower limit below the level of 1.1800. In case of the breakdown of the support level of 1.2120 next targets will be at the levels of 1.2000, 1.1850, 1.8000 and 1.1750 and the decline in the pair may continue. Short positions are preferable.
Support levels: 1.2400, 1.2270, 1.2120, 1.2000, 1.1850 and 1.1800.
Resistance levels: 1.2475, 1.2640, 1.2715, 1.2795, 1.2875 and 1.2900.
Sell Stop: 1.2450. Stop-Loss: 1.2510. Take-Profit: 1.2400, 1.2270, 1.2120, 1.2000, 1.1850 and 1.1800.
Buy Stop: 1.2510. Stop-Loss: 1.2450. Take-Profit: 1.2615, 1.2640, 1.2715, 1.2795, 1.2875 and 1.2900.
In the descending channel
The rise above the level of 1.2500 may trigger further rise up to 1.2640