Last week, the GBP strengthened against the USD, reaching new local highs since the beginning of July. The "bullish" dynamics was triggered by the instability of the US dollar amid the publication of various macroeconomic and news releases.

The British currency was supported by unexpectedly positive UK Consumer Price Index. However, later on, Retail Sales statistics weakened the "bullish" activity. At the beginning of this week, the upward trend is not so strong either.

GBP/USD: pound tries to strengthen

Support and resistance

On the daily chart, Bollinger Bands indicator is growing; the price range is widening, but still it is too narrow for the British pound. The indicator is giving a weak sell signal. Sell orders may be placed within a correction in the short run.

MACD is growing, giving a "bullish" signal. Long positions are still valid in the short run. At the same time, it is not recommended to open new positions right now.

Stochastic is approaching the overbought zone, indicating a possibility of a correctional rollback in the nearest future.

Support levels: 1.5659, 1.5600 (near 20 August local low), 1.5558 (18 August low), 1.5520, 1.5465, 1.5400, 1.5330 (8 July low).

Resistance levels: 1.5700 (the nearest mark), 1.5722 (21 August current high), 1.5770 и 1.5800 (near 24 August high).

Source: Claws&Horns

The information provided is for educational purposes only and should not be considered as investment advice.