GBP / USD: analysis and forecast
During yesterday's trading the US dollar raised up a little ground against the British currency after weeks of losses. GBP / USD pair dropped to the level of 1.5637. The fall was caused by a newfound faith in the dollar by investors. In addition, on Monday, the US currency strengthened against the major currency basket, as market participants focused their attention on the future, Friday's inflation data, as well as the publication of the Fed meeting minutes, which will be released on Wednesday.
Last week, the pound rose to near the highest peak in six months against the background of the comments of the Bank of England. Mr. Carney said that interest rates may be raised within a year. Answering the question of the BBC radio, whether interest rates are higher at this time next year, he said: "It's possible, but it depends on the economic development."
Today, we are waiting for the publication of data on inflation in the UK. According to analysts, the consumer price index on a monthly basis will increase from 0.2% to 0.4%. In annual terms, prices may remain unchanged. The pair will be supported if the forecasts are correct, otherwise we are waiting for further correction.
Support and resistance levels
Resistance levels: 1.5745 (yesterday's high), 1.5814 (the high of May 14), 1.5900 (moving average with a period of 200), 1.6000 (psychological level).
Support levels: 1.5631 (Asian session low), 1.5520 (the level of 23.6% Fibonacci retracement), 1.5340 (38.2% Fibonacci retracement level), 1.5190 (level 50% Fibonacci retracement).
The purchase entry after the breakdown level of 1.5750 with the first target at the level of 1.5810, and the second - at 1.5900. Short positions should be open on the level of 1.5630 with the targets 1.5520 and 1.5350.
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