GBP/USD: The Pound Reaches Record Highs
Today, during the Asian session, the GBP/USD pair is trading ambiguously, consolidating near the level of 1.3820 and the local highs since the end of April 2018.
Yesterday, the instrument was steadily climbing due to the poor positions of the US dollar. Additional support for the pound was provided by data on the dynamics of retail sales in the UK from the Confederation of British Industrialists in January.
On Wednesday, February 10, investors await the release of the NIESR estimate of the January GDP growth rate. Also, closer to the close of the daytime session, there will be speeches by the heads of the Fed and the Bank of England, who may clarify plans for monetary policy. Also, the January statistics on consumer inflation will be published today.
Support and Resistance:
On the daily chart, Bollinger Bands are rising moderately. The price range is expanding but not as fast as the “bullish” dynamics develop in the short term. The MACD indicator is growing, maintaining a moderate buy signal (the histogram is above the signal line). Stochastic, having approached its highs, is reversing into a horizontal plane, indicating that the instrument may become overbought in the super short term.
It is better to keep the current long positions until the signals from technical indicators are clarified.
Resistance levels: 1.3834, 1.3900, 1.3963, 1.4000.
Support levels: 1.3760, 1.3700, 1.3650, 1.3600.
Long positions may be opened after the breakout of 1.3834 with the targets at 1.3963–1.4000. Stop loss is 1.3760. Implementation period: 2–3 days.
Short positions may be opened after the rebound from 1.3834 and the breakdown of 1.3760 with the target at 1.3600. Stop loss – 1.3834.
USD/CHF: The Dollar Develops A Downward Trend
The USD/CHF pair is moderately declining, developing a downward impulse formed at the end of last week when the instrument retreated from its local highs. Now, it is testing the level of 0.8910 for a breakdown.
In the market, there are growing doubts that the US economy will be able to recover at a fast pace, and the expected stimulus package proposed by US President Joe Biden will ultimately lead to an increase in the current account deficit.
On Wednesday, investors are focused on the US statistics on the dynamics of consumer inflation for January, as well as the speech of the head of the US Federal Reserve, Jerome Powell, at the Economic Club of New York.
Support And Resistance
On the daily chart, Bollinger Bands are rising moderately. The price range is narrowing, reflecting the flat trading dynamics in the short term. The MACD indicator is going down, maintaining a relatively strong sell signal (the histogram is below the signal line). Stochastic also maintains a confident downward trend but is near the zero line, signaling that USD may become oversold in the short term.
It is better to keep current short positions and open new ones until the signals from technical indicators are clarified.
Resistance Levels: 0.8924, 0.8960, 0.9000, 0.9028.
Support Levels: 0.8900, 0.8880, 0.8850, 0.8837.
Short positions may be opened after the breakdown of 0.8900 with the target at 0.8850. Stop loss is 0.8924. Implementation period: 1–2 days.
Long positions may be opened after the rebound from the level of 0.8900 and the breakdown of 0.8924 with the target at 0.8980. Stop loss is 0.8900.
USD/JPY: Dollar Remains Under Pressure
Today during the Asian session, the USD/JPY pair is slightly strengthening, weakly compensating for the confident decline yesterday, caused by the negative sentiment of traders against the dollar.
American macroeconomic statistics are increasingly worse than experts’ expectations. It shows that the US economy will take more time to recover than it was estimated earlier. It’s worth noting that the US presidential administration has yet implemented its new $1.9 trillion stimulus program. Despite criticism of the new measures and opposition from the Republican Party, the aid package could give the US economy a strong upward momentum.
The data from Japan released on Wednesday did not have a noticeable impact on the instrument’s dynamics. Thus, the producer price index of goods for January slowed down from +0.5% to +0.4% MoM, which coincided with market expectations. January index of domestic prices for corporate goods increased slightly from –2% to –1.6% YoY.
Support And Resistance
Bollinger bands are actively growing on the daily chart. The price range is rapidly narrowing in response to a sharp change in trading direction in the short term. The MACD indicator reversed downwards and formed a new strong sell signal (the histogram is below the signal line). Stochastic shows a similar picture but is rapidly approaching its lows, indicating that USD may become oversold in the ultra-short term.
Resistance Levels: 104.75, 105.00, 105.16, 105.33.
Support Levels: 104.50, 104.20, 103.90, 103.60.
Long positions may be opened after the rebound from 104.50 and the breakout of 104.75 with the target at 105.16. Stop loss – 104.50. Implementation period: 2–3 days.
Short positions may be opened after the breakdown of 104.50 with the target at 103.90. Stop loss – 104.85.