GBP/USD: USD will continue to strengthen

GBP/USD: USD will continue to strengthen

Current trend
At the end of last week the British currency dropped against the USD amid negative UK statistics and strengthening in the USD. The pair was under pressure from the UK trade balance, as the index was far below the forecast. In the USA unemployment rate fell to 7.3%, while number of new jobs outside agricultural sector increased to 204 thousand. Following the release of US statistics the pair GBP/USD fell to the level of 1.5950; closing level of the last week was 1.6000.

Support and resistance
Following high volatility last week, the pair is trading near key support level of 1.6000. In the medium-term downtrend can consolidate and decline can reach key support level of 1.5750 (highs of June) and 1.5550 (level of 50% Fibonacci).

Indicators: MACD and Ichimoku confirm forecast of downtrend. MACD histogram is below the signal line, moving towards the negative zone. The line Tenkan has crossed Kijun from top to bottom under the cloud, forming a sell signal: Dead cross.

Support levels: 1.6000, 1.5920 and 1.5750.
Resistance levels: 1.6100 and 1.6260.

Trading tips

It is advisable to open short positions with the target at 1.5750.

Dmitry Likhachev
Analyst of LiteForex Group of Companies

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