Economic Reports from UK Are in the Focus of Attention

During last sessions, volatility and trading activity in the financial markets has grown significantly. First of all, this is due to the growing geopolitical risks and the strained trade relations between the US and China. These events put pressure on the American currency.

This week a number of important economic reports from the UK, which may have a significant impact on the placement of forces on the GBP/USD currency pair in the short term, will be published. This statistic may also affect the views of the Bank of England on further monetary policy. Most participants in financial markets believe that the Central Bank may raise interest rates at the next meeting, which will be held on May 10.

We recommend you to pay attention to the statistics on retail sales, which will be published on Thursday (11:30 GMT+3:00). This report reflects the confidence of consumers and is considered as an indicator of the country economic development rate. Experts expect that in March the indicator will decrease by 0.5% compared to the growth of 0.8% last month. We recommend you to take into account the difference between the actual and the forecasted values.

UK Retail Sales
Source: tradingeconomics.com
Let`s consider the current technical pattern on the GBP/USD currency pair
  • Support levels: 1.42850, 1.42000, 1.40900
  • Resistance levels: 1.43400, 1.44000
GBP/USD Pattern

Since the beginning of this month aggressive purchases have been observed on GBP/USD. During this period, the pound has strengthened against the US dollar by more than 300 points. A pronounced ascending channel has been formed on the trading instrument. Indicators signal the power of buyers:
- the price has fixed above 50 MA and 200 MA;
- the MACD histogram is located in the positive zone and continues to rise.

Nevertheless, a technical correction is not ruled out in the near future. The key support and resistance levels are 1.42850 and 1.43400, respectively. We recommend opening positions from these marks.

If the price has fixed above resistance level 1.43400, further growth of the GBP/USD quotes is expected. The immediate goal for profit taking is the round level of 1.44000.

Alternative option. If the price fixes below the support of 1.42850, a correction may develop on the GBP/USD currency pair. The movement is tending to 1.42000-1.41500.

by JustForex, 2018.04.19

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