FX.co ★ Forecast and technical analysis of GBP/USD for April 17-25, 2014

GBP- The United Kingdom's unemployment rate dropped to a five-year low of 6.9 per cent in the quarter to February, far below most of its European rivals, as the country's economic recovery picks up speed before next year's general election. The drop beats analysts' consensus forecast of a decrease to 7.1 percent. The rate for the period of December through February compares with 7.2 percent for the quarter ending January, the Office for National Statistics (ONS) said in a statement. The fall in unemployment would put pressure on Bank of England's Governor Mark Carney to hike the key interest rate from a record low of 0.50 percent sooner than expected.

Technical view-

Forecast April 17-25

GBP/USD was unable to cross the crucial level of 1.6823. It is the game change level for the next week trading pattern. The pair made a high at 1.6823 on February 17, 2014 and it's gone through a decent correction. The pair has been trying to cross the 1.6823 level for the last 2 months, but the bulls didn't succeed in their 2 attempts on April 10 and April 16. If we go through the weekly chart, we will see that if the pair is unable to cross the resistance level, we can treat it as a triple top pattern on a closing basis, which is not good for bulls. I expect something will happen to this pair in the next week's trading. If it crosses the 1.6823 level , the next week high will be printed at 1.6875, 1.6912, and 1.7043. I expect 1.6912 will be the high for the next week if the pair crosses the 1.6823 level.

On the down side, if the pair does not cross the 1.6823 level, it will drift up to near support at 1.678 levels. Safe traders can enter short positions below 1.678 levels for targets at 1.6718. In case of a break below the S2, the pair will drift more towards 1.6684, 1.6661, and 1.6650 levels. A day close below the 1.6723, the bear bells will start and the panic button will be hit if a day close below 1.6650 for 1.6554.

Intraday-

Currently, the pair is trading between 1.6823-1.6782. Breakout either side, it will give a room for further move towards 1.6875 or 1.6718 levels in intraday. The RSI in the H4 chart is giving a negative divergence, indicating higher selling will be possible. On the down side, it will face selling pressure at 1.678 levels, the targets T1 and T2 are marked in the below chart.

Recommendations-

Safe traders

Sell below 1.678 for targets at 1.6718, 1.6684, and 1.666.

Buy above 1.6823 for targets 1.6875 and 1.6912 levels.

Risky traders-

Sell at cmp 1.6798 levels with sl 1.6823.

Adopt a strategy and trade safe