Published On: Mon, Mar 20th, 2017

GBP/USD: general review

InstaForex

Current trend

Last week the pound gained ground after the Bank of England made its decision regarding the interest rate and published the minutes of its meeting on monetary policy. The strengthening of the pound took place following the weakening of the US dollar after FOMC’s decision regarding the interest rate. As a result, the pair reached its 3-weeks maximum and aimed at the upper border of the H4 (olive) channel and resistance at 1.2430.

Please find below a summary of the most relevant releases of the upcoming week. First of all, the UK is to publish its inflation data on Tuesday at 11:30 GMT +2. Consumer prices are expected to grow which is a positive factor provided the tendency of motenary policy tightening is pursued. J. Yellen, the head of FOMC, is to make a statement on Thursday at 14:00 GMT +2. The reaction of the marked will depend on the rhetorics regarding the plans of FOMC to increase the rate. Finally, an important event for the pair this week will be the expected decision of the UK Prime Minister Theresa May to enforce article 50 of the Lisbon Treaty marking the beginning of the two-year long procedure of the UK’s exit from the European Union. Many experts believe it will adversely influuence the pound due to the problems faced by the British economy due to Brexit.

Support and resistance

Resistance levels: 1.2430, 1.2510, 1.2580, 1.2700.

Support levels: 1.2345, 1.2250, 1.2200, 1.2110, 1.1980.

Trading tips

Long positions could be opened if the price consolidates above 1.2430 with a target at 1.2500 and stop-loss at 1.2400.

If the price bounces off the level of 1.2430, short positions could be opened with a target of 1.2345 and stop-loss at 1.2480.

Forex Analysis

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