LiteForex - Analytics

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    Analytical review of the currency pair GBP/USD on 05.02.2016

    GBP/USD

    Technical performance of the currency pair:

    Previous closing: 1.4588;
    Daily range: 1.4515-1.4591;
    Opening: 1.4588;
    52-week range: 1.4079-1.5930;
    Annual revenue: -4.00%;
    Change in % for the previous day: -0.17;


    Analytical review:

    • The currency pair GBP/USD has hardly reacted to the US Fed decision of 27 January. As expected, US Fed left interest rate unchanged at the level of 0,25%-0,50%;
    • Yesterday, the Bank of England decided to leave interest rate at the level of 0.5%. This news triggered the decline in the GBP to the lows of the trading session. Executives of the Bank of England believe that the pace of economic growth in the country will slow down (from 2.5% to 2.2%);
    • The head of the Bank of England Mark Carney said that serious economic problems of Chine, outflow of capital, capital movements, problems in the global stock markets and increased volatility are the reasons, which create additional risks to economic growth in the country;
    • The data released by “Commitments of Trader”» shows ambiguous picture. Larger speculators have varied opinions about the Pound. There are slightly more opened long positions than short positions (about 7%);
    • Today, important US news will become known (non-farm payrolls), which can affect further course of events.

    Summary:

    • Currently, the currency is traded near strong resistance level of 1.4560-1.4650. The Bank of England expects slowdown in the pace of economic growth of the country. Ambiguous situation in the world economy creates additional risks for the growth rate in GDP. According to “COT” large speculators do not have common opinion about the Pound.
    • We do not expect strong trend movement prior to the release of non-farm payrolls. It is recommended to enter the market for opening speculative trades at the lower timeframe.

    Trading tips for the currency pair GBP/USD

    Long-term trading:
    Prior to the release of non-farm payrolls on Friday, 5 February, changes in the movement direction of the British currency are not expected. At the moment we recommend to refrain from opening long positions on the pair GBP/USD. It is advisable to enter the market after the release of statistics on Friday and after the retesting of the key support and resistance levels and respective confirmation (such as pattern Price Action).


    Short-term trading:
    at the moment the currency has broken down the local support level of 1.4560 and consolidated below it. We recommend to enter the market from this level. Positions can be opened in view of the signal and support/resistance levels. We recommend “multi-trade” for this position. Take profit can be fixed in parts of 50%, 30% and 20% of the potential movement.



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