LiteForex analitics. GBP/USD: general review
GBP continues strengthening due to positive economic statistics and is testing the level of 1.3244 (Murrey [5/8]).
Wednesday's data on the Services PMI in the UK proved to be strong and strengthened GBP. In June, the indicator reached the 8-month maximum at 55.1 points. According to experts, this could lead to GDP growth by 0.4% in the UK in Q2 2018 and push the Bank of England to increase the interest rate at an August meeting. However, for such a decision, inflation in the country should be above the target level of 2.0%. Currently, this indicator continues to decline and has already reached the level of 2.4%.
The situation with Brexit remains controversial. Theresa May's Cabinet developed a new plan for customs cooperation with the EU. According to it, after leaving the EU, Britain will be able to set its own tariffs on imported goods while transit products going to the EU through the UK territory will have to be taxed by the EU duties.
Support and resistance
The price is testing the level of 1.3244 (Murrey [5/8]), the breakdown of which will give the prospect of growth to 1.3305 (Murrey [6/8]), 1.3366 (Murrey [7/8]). The key level for the "bears" seems to be 1.3183 (Murrey [2/8]), midline of Bollinger Bands). If it is broken down, the price may decline to 1.3122 (Murrey [3/8]) and 1.3061 (Murrey [2/8]). Technical indicators don’t provide a clear signal. Stochastic has reversed downwards, and MACD histogram is reducing in the positive zone.
Support levels: 1.3366, 1.3305.
Resistance levels: 1.3061, 1.3122, 1.3183.
Buy positions may be opened from 1.3260 with targets at 1.3305, 1.3366 and stop-loss at 1.3220. Sell positions may be opened from 1.3183 with targets at 1.3122, 1.3061 and stop-loss at 1.3220.
Implementation time: 3-5 days.