Current trend

The GBP/USD pair has been actively growing since the beginning of this month and is currently testing the 1.2939 mark (Murray level [6/8]).

The publication of a semi-annual report on the state of the national financial system from the Bank of England contributes to the strengthening of the British currency. The document states that the economy is still demonstrating resistance to a prolonged interest rate increase, but it will take time to fully assess its impact. According to experts, the share of heavily indebted households continues to grow, but still does not exceed the peak value of 2007. At the same time, large British banks maintain high capitalization, and their profits increase. Thus, they will be able to cope with further adjustment of the cost of borrowing.

The US currency, on the contrary, is under pressure due to the possible continuation of a pause in the tightening of the monetary policy of the US Fed. The fact is that employment in the country slowed down to 209.0K in June, and inflation continues to decline. The June statistics on the consumer price index will be published today: it is likely that the indicator will decrease from 4.0% to 3.1% on an annualized basis, and the base index will decrease from 5.3% to 5.0%. All this can become a catalyst for the transition by US Fed officials to keep the interest rate at current levels, despite the fact that they previously expected to resume its increase at a slow pace.

Support and resistance

Currently, the price is testing the level of 1.2939 (Murray level [6/8]), consolidation above which will allow the quotes to continue growing to the levels of 1.3061 (Murray level [7/8]) and 1.3183 (Murray level [8/8]). The key for the "bears" is the 1.2755 mark (the middle line of the Bollinger Bands), a breakdown of which will ensure a further decline to the levels of 1.2573 (Murray level [3/8]) and 1.2451 (Murray level [2/8]).

Technical indicators allow for further growth: the Bollinger Bands and the Stochastic are directed upwards, the MACD histogram increases in the positive zone.

Resistance levels: 1.2939, 1.3061, 1.3183.

Support levels: 1.2755, 1.2573, 1.2451.

Trading tips

Long positions can be opened above 1.2939 with targets at 1.3061, 1.3183 and stop-loss in the area of 1.2855. Implementation period: 5-7 days.

Short positions should be opened below 1.2755 with targets at 1.2573, 1.2451 and stop-loss in the area of 1.2855.