GBP/USD: Technical Analysis and Trading Recommendations_11/16/2021


The pound has strengthened quite sharply today. Its strengthening was promoted by the data from the British labor market published in the morning by the National Statistics Office of Great Britain. According to the report, the number of employed Britons increased in October (the number of jobs in the country amounted to 29.3 million, 160,000 more than in September), and their salaries increased. The presented data speaks in favor of an imminent increase in the key interest rate by the Bank of England, possibly already in December. In addition, the Governor of the Bank of England Andrew Bailey said on Monday that he was "very worried" about rising inflation and that the Central Bank's decision to keep rates unchanged earlier in November was not unanimous.

The GBP / USD pair rose sharply today, which cannot be said about other dollar pairs, reaching a local 5-day high near 1.3472.

Nevertheless, the downward trend prevails, the main driver of which is the strengthening of the dollar. Therefore, short positions below the important resistance level 1.3482 (ЕМА200 on the 1-hour chart) are not in danger, and the breakdown of support levels 1.3400 (ЕМА200 on the weekly chart), 1.3360 (local 11-month low) can significantly increase the risks of GBP / USD return to the long-term downtrend.

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In an alternative scenario, GBP / USD will resume its growth. The first signal for the resumption of purchases will be the breakdown of the important short-term resistance level 1.3482, and the breakdown of the key resistance levels 1.3685 (ЕМА200 on the daily chart), 1.3715 (ЕМА144 on the daily chart) will create preconditions for further growth of GBP / USD towards resistance levels 1.3900, 1.3970 (level Fibonacci 38.2% of the correction to the decline of the GBP / USD pair in the wave that began in July 2014 near the level of 1.7200), 1.4000.

Support levels: 1.3400, 1.3360, 1.3210

Resistance levels: 1.3482, 1.3610, 1.3640, 1.3685, 1.3715, 1.3832, 1.3900, 1.3970, 1.4000

Trading recommendations

Sell Stop 1.3390. Stop-Loss 1.3490. Take-Profit 1.3360, 1.3300, 1.3210

Buy Stop 1.3490. Stop-Loss 1.3390. Take-Profit 1.3610, 1.3640, 1.3685, 1.3715, 1.3832, 1.3900, 1.3970, 1.4000