Current trend

During the morning session, the GBP/USD pair is trading at 1.2630, preparing to continue rising to 1.2697. The pound is regaining lost ground after a decline caused by the publication of the US labor market’s strong statistics. The March change in nonfarm payrolls amounted to 303.0K against the forecast of 212.0K. The previous figure was corrected from 275.0K to 270.0K, and the unemployment rate reached 3.8%, below the forecast of 3.9% and 3.9% earlier.

Today, the pound is growing to 1.2697, supported by construction PMI: in March, the indicator increased from 49.7 points to 50.2 points, with a forecast of 50.0 points. On Friday, the market will receive gross domestic product (GDP) data, which may slow from 0.2% to 0.1%. In addition, industrial production volumes, according to preliminary estimates, will remain at the same level after –0.2% MoM in January and 0.5% YoY. The latest comments from members of the Board of Governors of the Bank of England support the pound, too. According to the general position, officials will keep interest rates at current levels longer than predicted. The regulator’s next meeting is scheduled for May 9, and borrowing costs may remain at 5.25%.

Support and resistance

The long-term trend is upward: the price is trading above the support level of 1.2525 and may reach 1.2697 and then 1.2875. After a breakdown of 1.2525, the trend will change downwards, and short positions with the target at 1.2322 will become relevant.

The medium-term trend is upward: last week, the quotes could not overcome the key trend support area of 1.2589–1.2559, and now long positions are relevant with the target at 1.2798 and then 1.2887.

Resistance levels: 1.2697, 1.2875.

Support levels: 1.2525, 1.2322.

Trading tips

Long positions may be opened from 1.2525, with the target at 1.2697 and stop loss 1.2475. Implementation time: 9–12 days.

Short positions may be opened below 1.2475, with the target at 1.2322 and stop loss 1.2535.