GBP/USD: THE BRITISH CURRENCY CONTINUES TO LOSE GROUND IN THE PAIR
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 1.2670 |
| Take Profit | 1.2540 |
| Stop Loss | 1.2720 |
| Key Levels | 1.2540, 1.2670, 1.2760, 1.2890 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 1.2760 |
| Take Profit | 1.2890 |
| Stop Loss | 1.2700 |
| Key Levels | 1.2540, 1.2670, 1.2760, 1.2890 |
Current trend
After Friday's decline, the GBP/USD pair is correcting, holding at 1.2734 in anticipation of tomorrow's British macroeconomic statistics and amid a slowdown in the growth of the American dollar.
The April gross domestic product (GDP) may decrease from 0.4% to 0.0%, reflecting the negative dynamics in the leading sectors of the economy. Today's data on the labor market did not have a significant impact on the quotes. The unemployment rate was 4.4%, and employment decreased by 140.0K jobs. The claimant count increased from 8.9K to 50.4K, and the average wage maintained its growth rate at 6.0%. In general, all indicators were worse than preliminary estimates, and if tomorrow's report turns out to be negative, it will strengthen the downward trend.
The American dollar has slowed its growth, trading at 105.10 in the USDX ahead of the two-day meeting of the US Fed on monetary policy, which begins today. Despite significant support for the economy on Friday, experts do not expect that the regulator will change the cost of borrowing: according to the readings of the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of keeping the interest rate at 5.25–5.50% is 99.6%. Analysts believe there will be no changes in the indicators in the summer, but it may change if the labor and real estate markets continue their positive dynamics.
Support and resistance
On the daily chart, the trading instrument is correcting, trying to leave the corrective Expanding formation pattern, and is holding around 1.2690. Technical indicators reverse downwards: fast EMA on the Alligator indicator are approaching the signal line, and the AO histogram is forming correction bars in the buy zone.
Resistance levels: 1.2760, 1.2890.
Support levels: 1.2670, 1.2540.
Trading tips
Short positions may be opened after the price declines and consolidates below 1.2670, with the target at 1.2540. Stop loss is 1.2720. Implementation period: 7 days or more.
Long positions may be opened after the price grows and consolidates above 1.2760, with the target at 1.2890. Stop loss is 1.2700.
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