GBP / USD: in search direction_23/10/2015

Trading recommendations

Sell ​​Stop 1.5360. Stop-Loss 1.5420. Take-Profit 1.5310, 1.5230, 1.5100

Buy Stop 1.5440. Stop-Loss 1.5380. Take-Profit 1.5485, 1.5525


Overview and Dynamics

As reported yesterday, the National Bureau of Statistics (ONS) the UK, retail sales in the country in September compared with the previous month increased by 1.9% (+ 6.5% yoy), showing the strongest monthly increase since December 2013 forecast It was 0.3% m / m, + 4.7% y / y. However, the price of retail goods in the UK in September also fell by a record 3.6% in annual terms. However, the GBP / USD pair rose sharply on news, entrenched in an hour by more than 60 points. However, further dynamics of couples have already passed in the opposite direction in line with the news from the ECB when his head Mario Draghi quite made it clear that the ECB is ready to expand the bond purchase program and the management of the European Central Bank will evaluate the adequacy of current incentive measures at its next meeting in December.

Following a strong fall in the euro, GBP / USD has also closed yesterday below its opening price, despite the strong support of the pound in cross-country EUR / GBP. Despite the fact that the UK is not part of the Eurozone and its economy is closely linked to the euro area economy.

However, because the service sector is the main sector of the economy, accounting for almost 80% of GDP, the recovery of retail sales after two months of weak growth - good news for the British economy. Despite the fact that the Bank of England forecasts GDP growth in the third quarter by 0.6%, many economists believe economic growth in the UK slowed to 0.5% from 0.7% in Q2.

Given the growth of labor productivity, wages and retail sales data on GDP growth in Q3 may be more positive and, according to economists, productivity is paramount for sustained growth in the medium term in the UK.

The next meeting of the Bank of England's interest rate will be held on November 5, after similar meetings FRS (28 October), the Bank of Japan (30 October).

If the Fed will not raise interest rates in the US, followed by the ECB, the Bank of Japan, Bank of England may also revert to the issue of monetary policy easing to stimulate the British economy at low rates of GDP and inflation in the country.

And after yesterday's comments Mario Draghi confidence returned to the markets that the Fed will not raise interest rates in the United States next week. It is likely that in December, amid a slowing global economy and the easing of monetary policy by the central banks of the largest regional economies in the world, as the Fed will refrain from tightening monetary policy in the United States. Yesterday's growth of American stock indices today with the opening of the trading day as Asian stocks picked up. So the Japanese Nikkei Stock Average on the basis of trades rose by 2.1%, Chinese Shenzhen Composite Index - on 2,9%, ChiNext - by 3.3%. US dollar with the opening of the trading day declines in most major dollar currency pairs, including a pair GBP / USD.


Technical Analysis

Short positions - are preferred, however, from the point of view of technical analysis in the GBP / USD pair formed a contradictory picture. If the hourly chart price broke the 1.5410 key support (EMA200) and the indicators signal a continuation of the decline, the 4-hourly chart GBP / USD pair is in a good position for shopping. The price is in the zone of strong support levels 1.5380 (EMA200, EMA144) and on the bottom line of the ascending channel. OsMA and Stochastic indicators are starting to turn to long positions. On the daily chart the price is at a support level EMA50 below EMA200, EMA144 and indicators recommended short positions. Thus, the breakdown level of 1.5380 will send the pair down to the level of 1.5230 (23.6% Fibonacci level). Otherwise, when the price rises above 1.5420 will go to the level of 1.5440 (EMA144), 1.5485 (EMA200 on the daily chart).