GBP/USD: correction at the end of the week 12 February 2021, 09:53

 

GBP/USD: correction at the end of the week

12 February 2021, 09:53

Scenario
Timeframe	Intraday
Recommendation	SELL STOP
Entry Point	1.3755
Take Profit	1.3650
Stop Loss	1.3820
Key Levels	1.3600, 1.3650, 1.3700, 1.3760, 1.3864, 1.3900, 1.3963, 1.4000

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.3870
Take Profit	1.4000
Stop Loss	1.3800
Key Levels	1.3600, 1.3650, 1.3700, 1.3760, 1.3864, 1.3900, 1.3963, 1.4000

Current trend

GBP declines against USD during today's Asian session, retreating from record highs updated in the middle of this week. The decrease in the instrument is due to the restoration of the positions of USD, which previously reacted negatively to the speech of the Fed Chair, Jerome Powell, who spoke in favor of maintaining a flexible monetary policy, but pointed out the damage that the pandemic has brought to the American labor market. According to the chairman of the regulator, the restoration of the labor market may take years, while additional measures of support and stimulation may be required.

Today, British investors are awaiting the publication of macroeconomic statistics from the UK. The focus will be on statistics on GDP dynamics for Q4 2020. The forecasts assume that the British economy will slow down from +16% QoQ to +0.5% QoQ.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range expands slightly from above, freeing a path to new local highs for the "bulls". MACD has reversed downwards preserving a buy signal (located above the signal line). Stochastic demonstrates similar dynamics, reversing downwards at its highs.

The appearance of a full-fledged downtrend is possible in the short and/or ultra-short term.

Resistance levels: 1.3864, 1.3900, 1.3963, 1.4000.

Support levels: 1.3760, 1.3700, 1.3650, 1.3600.

Trading tips

To open new short positions, one can rely on the breakdown of 1.3760. Take-profit – 1.3650. Stop-loss – 1.3820. Implementation time: 2-3 days.

A rebound from 1.3760 as from support followed by a breakout of 1.3864 may become a signal for new purchases with the target at 1.4000. Stop-loss – 1.3800.