LiteForex - Analytics

    LiteForex

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    Analytical review of the currency pair GBP/USD of 12.05.2016.

    Technical data of the currency pair:

    Previous closing: 1.4447;
    Daily range: 1.4406-1.4454;
    Opening: 1.4447;
    52- week range: 1.3833-1.5930;
    Annual revenue: -7.83%;
    Change in % for the previous day: -0.04. 

    Analytical review:

    • Last week the Pound fell by 250 points against the USD. In the past three sessions the currency is traded in the range of 1.4395-1.4475;
    • Yesterday, British Office of National Statistics released data showing that production volume in the manufacturing sector rose 0.1% against the decline of 0.9% a month earlier and the forecast of 0.3%;
    • ONS also reported that referendum on Brexit scheduled for 23 June will not affect production in the country;
    • “Commitments of Traders” shows the increase in short positions by 8536 contracts up to 134508. 192010 contracts have been opened for long positions;
    • Today, a meeting of the Bank of England will be held. It is expected that the regulator will leave interest rate unchanged.

    Summary:

    • Weak UK statistics, uncertainty about Brexit and increased volatility in the financial market put strong pressure on the currency pair;
    • According to “COT” large speculators increased the number of short positions.
    • Prior to the interest rate decision by the Bank of England, changes in the market are not expected. It is recommended to enter the market for opening trades on the short timeframes.

    Trading tips for the currency pair GBP/USD

    Key levels:
    Support level: 1.4395
    Resistance levels: 1.4475 and 1.4545

    Long-term trading, D1
    Prior to the meeting of the Bank of England, changes in the Pound dynamics are not expected. At the moment, it is advisable to refrain from opening long-term trades on the currency pair GBP/USD. It is recommended to enter the market when the outcome of the meeting is known and after retesting of the key support and resistance levels and in case of the respective confirmation (such as Price Action pattern).

    Long-term trading, D1
    Long-term trading, D1

    Short-term trading, М15
    At the moment the currency is traded in the range of 1.4405-1.4445. it is recommended to enter the market after breaking out and testing of this zone. Positions can be opened at the signal line and the nearest support/resistance levels. per trade is not more than 3% of capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.

    Short-term trading, М15
    Short-term trading, М15

     

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