Overview: GBP/USD is consolidating with bullish bias after hitting a two-year high of 1.6465 Tuesday. It is supported by negative USD sentiment; NIESR U.K. November monthly GDP estimate of +0.8%; expectations that the Bank of England may have to raise interest rates sooner than previously expected. But sterling sentiment is dented by lower-than-expected U.K. October industrial production (+3.2% on year versus +3.3% forecast) and manufacturing output (+2.7% on year versus +2.9% forecast); wider-than-expected U.K. October global goods trade deficit of GBP9.7 billion (versus forecast GBP9.3 billion deficit). GBP/USD gains are also tempered by sterling sales in soft GBP/JPY cross amid increased investor risk aversion.
Technical comment: Daily chart is positive-biased as MACD and stochastics are bullish, although the latter is at overbought; the 5- & 15-day moving averages are advancing.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 1.647 and the second target at 1.65. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 1.639. The breach of this target will move the pair further downwards and one may expect the second target at 1.635. The pivot point stands at 1.642.
Resistance levels: 1.647 1.65 1.653
Support levels: 1.639 1.635 1.631
The material has been provided by InstaForex Company – www.instaforex.com
Overview:
GBP/USD is consolidating with bullish bias after hitting a two-year high of 1.6465 Tuesday. It is supported by negative USD sentiment; NIESR U.K. November monthly GDP estimate of +0.8%; expectations that the Bank of England may have to raise interest rates sooner than previously expected. But sterling sentiment is dented by lower-than-expected U.K. October industrial production (+3.2% on year versus +3.3% forecast) and manufacturing output (+2.7% on year versus +2.9% forecast); wider-than-expected U.K. October global goods trade deficit of GBP9.7 billion (versus forecast GBP9.3 billion deficit). GBP/USD gains are also tempered by sterling sales in soft GBP/JPY cross amid increased investor risk aversion.
Technical comment:
Daily chart is positive-biased as MACD and stochastics are bullish, although the latter is at overbought; the 5- & 15-day moving averages are advancing.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 1.647 and the second target at 1.65. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 1.639. The breach of this target will move the pair further downwards and one may expect the second target at 1.635. The pivot point stands at 1.642.
Resistance levels:
1.647
1.65
1.653
Support levels:
1.639
1.635
1.631
The material has been provided by InstaForex Company – www.instaforex.com
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