GBP/USD: decline amid negative macroeconomic data 18 January 2021, 11:00

 

GBP/USD: decline amid negative macroeconomic data

18 January 2021, 11:00

Scenario
Timeframe	Weekly
Recommendation	SELL STOP
Entry Point	1.3430
Take Profit	1.3000
Stop Loss	1.3500
Key Levels	1.3000, 1.3434, 1.3700, 1.4000

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.3705
Take Profit	1.4000
Stop Loss	1.3600
Key Levels	1.3000, 1.3434, 1.3700, 1.4000

Current trend

The GBP/USD pair declines, trading around 1.3569.

For the third day in a row, the number of new cases of coronavirus exceeds 40K, and the number of deaths exceeds 1000 people against the tough quarantine, which, according to the government, could be extended until March. British macroeconomic statistics also disappoint investors. The level of intermediate GDP for November was –2.6% after 0.4% for October. Manufacturing production for the same period decreased to 0.7% from 1.6% for October, and the non-EU trade balance amounted to –8.01 billion pounds, which is significantly worse than October –5.82 billion.

The US dollar index is recovering from the December losses and is growing, reaching 90.800. Preparations for the inauguration of Joe Biden continue in Washington, and unprecedented security measures are deployed on the streets of the city. About 25K troops have been sent to the city, and all streets adjacent to the Capitol are blocked and equipped with security checkpoints. The ceremony itself is due to take place on Wednesday, and Donald Trump said he would not be present.

Support and resistance

Globally, the instrument moves within a wide sideways channel, approaching the support line. Technical indicators are in a buying state, gradually narrowing the fluctuation range. Alligator indicator’s EMA fluctuations range narrows, the AO oscillator histogram approaches the transition level.

Resistance levels: 1.3700, 1.4000.

Support levels: 1.3434, 1.3000.

Trading tips

After decline or consolidation below the local support of 1.3434, sell positions with the target at 1.3000 are relevant. Stop loss is 1.3500. Implementation period: 7 days or more.

After growth or consolidation above the local resistance of 1.3700, buy positions with the target at 1.4000 are relevant. Stop loss is 1.3600.