FX.co ★ Technical analysis and trading recommendations on GBP against USD & YEN for March 05, 2015

GBP/USD

REVIEW

The UK service sector continued to expand at a notable pace during February, supported by another sharp rise in a number of new businesses. New businesses increased at the sharpest pace for three months. Employment rises at the second-fastest rate in the survey history. Both input and output prices also increased their pace of growth. These are the key points in Markit news release. The headline seasonally adjusted Business Activity Index recorded 56.7 in February, compared to January’s 57.2. Service growth printed a downtick, but staff hiring gave the thumbs up. The positive US data pushed the pair to a monthly low. It raises hopes for the benchmark interest rate hike. The Federal Reserve Beige book was released.

Upcoming events

Today, traders eye BoE interest rate decision. Besides, US will publish factory orders report.

Technical view-

The pound fell sharply to a monthly low against the US dollar at yesterday's session. Ahead of the day full of heavy-duty data, the pair is trading in a muted way at the Asian session. We are bullish for the British pound against crosses, but still remain cautious about the US dollar. The support seems at 1.5200. At yesterday's session, the cable broke below the nearest support zone and closed below 50Dsma. These factors prove a bearish view in the near term. The intraday resistance is found at 1.5280 50Dsma and 1.5330 34-hrsma. At yesterday's session, we recommended selling below 1.5345 with targets at 1.5330, 1.5316, and 1.5280. The pair made a low at 1.5250. The cable has been improving the support base from the lows of 1.4951. If we look at the daily chart, prices are moving up and consolidating, again pushing to a new high with consolidation. This time, the price is consolidating in the crucial support zone at 1.5200. Until the prices close below 1.5400, the bearish view remains on play.

Resistance: 1.5370, 1.5400, 1.5460.

Support: 1.5345, 1.5330, 1.5280.

Trade: selling below 1.5250 with a target at 1.5200, panic will be triggered below 1.5190 with targets at 1.5170 and 1.5140.

GBP/JPY

The publication of UK's data pushed the cross to a weekly low. Service growth printed a downtick, but staff hiring gave the thumbs up. The cross is going on its five-week uptrend. The cross made a double top at 185.00. The cross broke and closed below the strong support base of 183.50. We are bullish about GBP against crosses. The weekly support is seen at 183.50 and 182.40 20Wsma. The pound favors buying on dips against the cross currencies. Today, traders eye BoE interest rate decision. Ahead of the event, the pound is trading higher against the yen. The intraday support is found between 182.50 and 182.40. On a monthly basis, until the cross closes above 181.50, the long trade remains in play. Bulls are trying to close above 182.40 on a weekly basis. The price closed and is trading below the hourly moving averages on h1 and h4 charts, proving bearish views. For an intraday view, we recommend fresh buying above 182.90 with a targes at 184.00.The safe buying will be triggered above 184.00. Besides, you are recommended to sell below 182.40 with targets at 182.20, 182.00, and 181.70. We can expect strong momentum only above 184.00. The trading is shifted to 181.50 to 184.00 from 185.00 to 183.50. The panic will be triggered below 181.50 towards 181.00 and 180.00 odd levels.

Trade: buying above 182.90.