Published On: Mon, Feb 27th, 2017

GBP/USD: the pair returned to the downward channel

InstaForex

Current trend

The pair GBP/USD has reversed and began to fall rapidly due to the growing demand for the American currency. Today the pair has made several unsuccessful attempts to break through the key support of 1.2390, but is still trading above this level.

Particular attention should be paid to data on orders for durable goods in the US. In addition, the rate of economic growth and statistics on the main indices and the US labor market will be published this week. UK will reply with data on the PMI index in the service sector, construction sector and mortgage lending.

Support and resistance levels

Technically, the probability of the return of the pair in the descending channel is really high. In the short term we expect an increased demand for the dollar, which will lead to a breakthrough of support level of 1.2390 and further fall with the targets of 1.2350, 1.2310. Technical indicators are showing a decline in the liquidity of the pair: MACD signal line is near zero; the Bollinger bands lined up horizontally.

Support levels: 1.2390, 1.2350, 1.2310, 1.2250, 1.2070, 1.2000, 1.1900.

Resistance levels: 1.2505, 1.2580, 1.2665, 1.2705, 1.2775.

Trading tips

In this situation t short positions can be opened with the targets at 1.2310, 1.2085 and stop loss at around 1.2530.

Forex Analysis

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