LiteForex - Analytics

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    Analytical review of the currency pair GBP/USD on 17.03.2016

    GBP/USD

    Technical data of the currency pair:

    Previous closing: 1.4260;
    Daily range: 1.4222-1.4291;
    Opening: 1.4260;
    52- week range: 1.3833-1.5930;
    Annual revenue: -3.23%;
    Change in % for the previous day: 0.67.


    Analytical review:

    • In the last 2 sessions the Pound has decreased by over 350 points against the USD. During yesterday’s session the GBP has corrected by 0.67%.
    • Yesterday morning the currency slightly went down because the UK government had lowered GDP growth forecast for 2016. It is expected that economy of the country will grow by 2.0% against the previous forecast of 2.4%.
    • As expected, yesterday the US fed left interest rate at the previous level of 0.25-0.50%. Bank’s management said that steady growth of employment in the country gives ground for tightening monetary policy in the country this year. The US Fed also noted that ambiguous situation in the global economy and high volatility in the financial markets create additional risks for the economy of the country.
    • “Commitments of Traders” shows that long positions increased by 16093 contracts up to 242556.
    • Some important British statistics will become known this week, which can affect exchange rate of the pair. On Thursday, 17 March interest rate decision by the Bank of England will become known.

    Summary:

    • Despite negative British macro-economic statistics, the Pound rose by 200 points against the USD. Investors’ attention will be focused on the interest rate decision in the UK. According to “COT,” large speculators prefer the GBP.
    • In the near future the GBP will rise against the USD. We recommend to open long positions at the smaller timeframes.

    Trading tips for the currency pair GBP/USD

    Long-term trading:
    prior to the announcement of the interest rate decision by the Bank of England on Tuesday, 17 March, the GBP is unlikely to change movement direction. At the moment we recommend to refrain from opening long-term transactions on the pair GBP/USD. It is advisable to enter the market after the release of the data and retesting the key support and resistance levels and in case of respective confirmation (for example, a pattern Price Action).


    Short-term trading: the moment the currency is traded in the range of 1.4220-1.4290. We recommend to open short-term speculative long position after breaking out and testing resistance level of 1.4290. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 1.4340, 1.4375 and 1.4410 with the use of trailing stop.



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