Technical Analytics Report

GBP/USD: Fundamental Analysis Report 07 April 2021

 

Current Trend: pressure from non-manufacturing PMI data

 This week, the price grew to 1.3916, but by now it has lost its gains.

Today the pound came under pressure from the March data on the UK Services PMI. The indicator entered the growth zone, having increased from 49.5 to 56.3 points, but turned out to be lower than the forecast (56.8 points). Industry officials cite an increase in orders stemming from the relaxation of quarantine restrictions, and two-thirds of service businesses said they hoped to grow during the year. Also, the pound was reduced by comments from representatives of the European Medicines Agency, who recognized the link between vaccinations with AstraZeneca and the formation of blood clots. These claims could slow down vaccination in the UK population, as this is the most commonly used drug for the purpose.

 The US dollar gains support after the February JOLTS job market data was released, rising from 7.099 million to 7.367 million. Today investors are awaiting the publication of the minutes of the last meeting of the US Fed, which may cause significant movement in the market. Despite the fact that the regulator announced the long-term preservation of current interest rates, investors will look in the document for hints as to when the Fed will begin to tighten monetary policy.

 Support and Resistance

 The price is testing 1.3793 (Murrey [1/8]), the breakout of which will give the prospect of a decline to 1.3671 (Murrey [0/8]) and 1.3550 (Murrey [−1/8]). The level of 1.3916 (Murrey [2/8]) is the key for the “bulls”. After its breakout, growth will continue to 1.4038 (Murrey [3/8]) and 1.4160 (Murrey [4/8]).

 Technical indicators show the continued decline: Bollinger Bands and Stochastic are reversing down, MACD histogram is stable in the negative zone.

 Resistance levels: 1.3916, 1.4038, 1.4160.

Support levels: 1.3793, 1.3672, 1.3550.

 Trading Tips 

·         Short positions may be opened below 1.3793 with targets at 1.3672, 1.3550 and stop-loss at 1.3875. Implementation period: 5–6 days.

·         Long positions may be opened above 1.3916 with targets at 1.4038, 1.4160 and stop-loss at 1.3825.

 Scenario

 Timeframe: Weekly

 Recommendation: Sell Stop

 Entry Point: 1.3790

 Take Profit: 1.3672, 1.3550

 Stop Loss: 1.3875

 Key Levels: 1.3550, 1.3672, 1.3793, 1.3916, 1.4038, 1.4160

 Alternative Scenario

 Timeframe: Weekly

 Recommendation: Buy Stop

 Entry Point: 1.3920

 Take Profit: 1.4038, 1.4160

 Stop Loss: 1.3825

 Key Levels: 1.3550, 1.3672, 1.3793, 1.3916, 1.4038, 1.4160


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