Current trend

After active growth at the beginning of the month, the GBP/USD pair is reversing downwards with the support of a local correction of the American currency, holding during the Asian session at 1.2888.

The macroeconomic statistics support the pound. Manufacturing PMI rose from 50.9 points to 51.8 points, and the services PMI from 52.1 points to 52.4 points. The composite PMI changed from 52.3 points to 52.7 points, allowing investors to hope for a strengthening of the pound, at least, until the publication of the labor and real estate markets data next week. The indicators are recovering after a period of uncertainty associated with the parliamentary elections in the country, contributing to the gross domestic product (GDP) growth. However, most experts are confident that Bank of England officials will begin active actions no earlier than autumn.

The American dollar is trading at 103.90 in USDX. After the recent report on existing home sales, which decreased from 4.11M to 3.99M, new home sales fell from 621.0K to 617.0K, the lowest since November. One of the reasons for the low activity of the buyers is the high interest rate on 30-year mortgages, which, despite the correction this week from 6.87% to 6.82%, does not allow citizens to make large purchases in the context of high inflation.

Support and resistance

On the daily chart, the trading instrument retreats from the resistance line of the ascending channel 1.3070–1.2750.

Technical indicators are reversing downwards: fast EMA on the Alligator indicator are approaching the signal line, and the AO histogram is forming correction bars, falling into the buy zone.

Resistance levels: 1.2930, 1.3040.

Support levels: 1.2860, 1.2750.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.2860, with the target at 1.2750. Stop loss — 1.2910. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.2930, with the target at 1.3040. Stop loss — 1.2880.