Current trend
Yesterday, GBP declined significantly against USD, returning to the lows of July 20, due to the Bank of England Minutes release.
The regulator decided to raise the interest rate from 0.50% to 0.75% (maximum level since 2009), but Mark Carney's comments were very restrained, which created pressure on the pound. The official noted that further rate increases will be gradual and limited, inflation will return to the target level of 2.0% only by 2020, and a gradual tightening of monetary policy must be carried out throughout this period. He also stated that negotiations on Brexit enter a "critical period" and the regulator is preparing for all possible, including negative, scenarios.
On Friday, July data on British Services PMI are expected. The decrease from 55.1 to 54.7 points is expected, which may put additional pressure on GBP.
Support and resistance
On the daily chart, Bollinger bands are moderately reduced. The price range is slightly expanding, but not as fast as the "bearish" mood develops. MACD decreases, keeping a weak sell signal (the histogram is below the signal line). Stochastic is directed downwards, but is near its lows, which reflects that the instrument is oversold.
The corrective growth of GBP is possible in the short and/or ultra-short term.
Resistance levels: 1.3048, 1.3100, 1.3169, 1.3211.
Support levels: 1.3000, 1.2956, 1.2900, 1.2850.
Trading tips
Long positions can be opened after a rebound from the level of 1.3000 and breakout of the level of 1.3048 with the target at 1.3169 or 1.3211. Stop loss is 1.2990.
Short positions can be opened after the breakdown of the level of 1.3000 with the target at 1.2900 or 1.2850. The stop loss is 1.3050–1.3060.
Implementation period: 2–3 days.
Trade
Scenario
Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.3055
Take Profit 1.3169, 1.3211
Stop Loss 1.2990
Key Levels 1.2850, 1.2900, 1.2956, 1.3000, 1.3048, 1.3100, 1.3169, 1.3211
Alternative scenario
Recommendation SELL STOP
Entry Point 1.2990
Take Profit 1.2900, 1.2850
Stop Loss 1.3050, 1.3060
Key Levels 1.2850, 1.2900, 1.2956, 1.3000, 1.3048, 1.3100, 1.3169, 1.3211
Yesterday, GBP declined significantly against USD, returning to the lows of July 20, due to the Bank of England Minutes release.
The regulator decided to raise the interest rate from 0.50% to 0.75% (maximum level since 2009), but Mark Carney's comments were very restrained, which created pressure on the pound. The official noted that further rate increases will be gradual and limited, inflation will return to the target level of 2.0% only by 2020, and a gradual tightening of monetary policy must be carried out throughout this period. He also stated that negotiations on Brexit enter a "critical period" and the regulator is preparing for all possible, including negative, scenarios.
On Friday, July data on British Services PMI are expected. The decrease from 55.1 to 54.7 points is expected, which may put additional pressure on GBP.
Support and resistance
On the daily chart, Bollinger bands are moderately reduced. The price range is slightly expanding, but not as fast as the "bearish" mood develops. MACD decreases, keeping a weak sell signal (the histogram is below the signal line). Stochastic is directed downwards, but is near its lows, which reflects that the instrument is oversold.
The corrective growth of GBP is possible in the short and/or ultra-short term.
Resistance levels: 1.3048, 1.3100, 1.3169, 1.3211.
Support levels: 1.3000, 1.2956, 1.2900, 1.2850.
Trading tips
Long positions can be opened after a rebound from the level of 1.3000 and breakout of the level of 1.3048 with the target at 1.3169 or 1.3211. Stop loss is 1.2990.
Short positions can be opened after the breakdown of the level of 1.3000 with the target at 1.2900 or 1.2850. The stop loss is 1.3050–1.3060.
Implementation period: 2–3 days.
Trade
Scenario
Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.3055
Take Profit 1.3169, 1.3211
Stop Loss 1.2990
Key Levels 1.2850, 1.2900, 1.2956, 1.3000, 1.3048, 1.3100, 1.3169, 1.3211
Alternative scenario
Recommendation SELL STOP
Entry Point 1.2990
Take Profit 1.2900, 1.2850
Stop Loss 1.3050, 1.3060
Key Levels 1.2850, 1.2900, 1.2956, 1.3000, 1.3048, 1.3100, 1.3169, 1.3211