GBP/USD: Pair Remains Under Pressure
LiteForex Europe | May 30, 2016 09:17AM ET
GBP/USD: In the end of last week, the pair substantially declined amid strengthening in the US dollar, which was supported by the speech from Fed Chair Janet Yellen. In her speech, she highlighted noticeable improvements in the US economy and on the labour market, which makes the next interest rate increase viable within coming months. Despite a slow pace in wage growth, the labour market is approaching its full employment and, thus, permits further monetary policy tightening.
At present, Fed Funds futures indicate more than a 30% probability of the rate increase at June’s meeting of the regulator.
Bollinger Bands on the daily chart is trying to turn horizontally while the price range is narrowing from the bottom. MACD is turning down having formed a sell signal. Stochastic turned down as well as it bounced off the border of the overbought zone.
The indicators recommend short positions.
Support levels: 1.4600 (local low), 1.4561, 1.4527, 1.4500, 1.4442 (23 May low), 1.4400, 1.4374, 1.4332 (16 May low), 1.4300.
Resistance levels: 1.4663 (local high), 1.4739 (26 May high), 1.4739, 1.4771 (3 May high), 1.4800 (psychologically important level).
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