Overview:
GBP/USD is trading in a lower range. It is undermined by comment from Bank of England's Martin Weale that there's been a "sharp and unexpected" decline in inflation since summer and it's less likely that the central bank's forward guidance policy will be voided; sterling sales in soft GBP/JPY cross amid increased investor risk aversion; sterling sales in buoyant EUR/GBP cross.
Technical comment:
Daily chart is mixed as MACD is bullish, but stochastics is turning bearish in overbought area.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 1.635 in view; a breach of this target will move the pair further downwards to 1.632. The pivot point stands at 1.6415. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favorably expected to move further to the upside. In that scenario a long position is recommended with the first target at 1.644 and the second target at 1.647.
Resistance levels:
1.644
1.647
1.65
Support levels:
1.635
1.632
1.629
