General analysis GBPUSD for 05.11.2021
Current Dynamics
Last Thursday the pair GBP/USD demonstrated the largest intraday drop in 2021. The reason for the pound's weakness was the meeting of the British regulator on monetary policy, which strongly disappointed the market participants. The fact is that for a long time the Governor of the Bank of England Andrew Bayley gave clear "hawkish" signals to the market, which contributed to strong growth of British bonds. At the beginning of this week, everyone was sure of a key rate hike and the beginning of the reduction of the quantitative easing program. However, there were no changes. The head of the regulator acted unprofessionally, making promises that he unmotivated changed his mind. Bailey's press conference only added to doubts about the competence of the official, who said that it was not his responsibility to manage the markets.
The Fed, however, had been more consistent the day before. As planned, the regulator began to cut QE, with a complete withdrawal of stimulus measures to occur in July 2022. Jerome Powell said that the pace of reduction may be adjusted depending on macroeconomic data.
Today at 14:30 (GMT+2) the most important report on the U.S. labor market was released.
Support and resistance levels
On the 4-hour chart the instrument descends along the lower Bollinger band. The indicator is pointing downward and the price range has widened considerably, which indicates that the pair will continue falling. MACD histogram is holding a strong buy signal. Stochastic is correcting in the oversold area, no signal to open positions has been formed.
- Support levels: 1.3335, 1.3380, 1.3425.
- Resistance levels: 1.3480, 1.3550, 1.3585, 1.3650, 1.3695, 1.3745.
Trading scenarios
- Short positions should be opened at the current price with a target of 1.3382 and a stop-loss at 1.3490. Implementation period: 1 day.
- Long positions can be opened above the level of 1.3510 with a target of 1.3580 and a stop-loss at the level of 1.3470. Implementation period: 1 day.