Current trend

During the Asian session, the GBP/USD pair is testing the support level of 1.2700 for a breakdown amid low investor activity in anticipation of new drivers.

Yesterday, due to the lack of macroeconomic statistics from the UK, asset trading volumes decreased slightly, which will change tomorrow after the publication of a report by the British Nationwide Building Society on housing prices: according to forecasts, the May indicator may increase by 0.1% after a decline of –0,4%. In addition, consumer lending could fall from 1.577B pounds to 1.500B pounds, but net consumer lending may increase from 1.8B pounds to 2.0B pounds. The number of approved mortgage applications in April may adjust from 61.325K to 61.500K, supporting the national economy.

The American dollar is trading at 105.0 in USDX amid expectations for the publication today at 14:30 (GMT 2) of data on the volume of US gross domestic product (GDP), which, according to preliminary estimates, will decrease from 3.4% to 1.6%, and in terms of the number of initial applications for unemployment benefits: the number of initial applications may increase from 215.0K to 218.0K, and repeat applications for the week of May 17 from 1.794M to 1.800M.

Under these conditions, a further decline in the GBP/USD pair looks most likely.

Support and resistance

On the daily chart, the trading instrument is moving within a new range between the first order levels (I) and is preparing to test the passed right first order resistance level (I) 1.2697. Further dynamics will most likely develop in a poor downward trend, where the crosshair of the right support of the third order (III) and the left support of the first order (I) 1.2673 will become the nearest target, and the crosshair of the right support of the first order (I) and the left support of the third order (III) 1.2441 – long-term one.

An alternative scenario is a reversal and growth of the quotes to the crosshair of the third-order right resistance (III) and the third-order left resistance (III) 1.2849, and then to the crosshair of the third-order left resistance (III) and the second-order right resistance (II) 1.3023.

Resistance levels: 1.2849, 1.3023.

Support levels: 1.2673, 1.2441.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.2673, with the target at 1.2441. Stop loss – 1.2750. Implementation period: 7 days or more.

Long positions may be opened after the price rises and consolidates above 1.2849, with the target at 1.3023. Stop loss is around 1.2790.