The GBP/USD has done very little to start this week, although it has just recently dropped back below the 1.51 level. It did well at the end of last week to reverse and recover a little back above 1.51 after having fallen strongly to a new two month low close to 1.50 in the couple of days prior. For a few days about a week ago it found some support around 1.5160 however this level has been clearly broken. The 1.5160 level has been providing some resistance of late as the pound continues to try and rally higher. In moving down to near 1.50 last week, the pound was at levels not seen since early March. The pound has now experienced a strong fall over the last few weeks. Prior to the last few weeks, the pound enjoyed a strong couple of weeks and move to new highs above 1.56. It experienced all sorts of bother at 1.56 as it made several pushes to this significant level however it was turned away with excessive supply. For about a week it ran into a wall of resistance right around the 1.56 level. The pound had enjoyed a very solid couple of weeks moving from the support level at 1.52 to reach new highs at 1.56, a new ten week high.
Back around mid April the pound experienced solid support at 1.52 for about a week which greatly assisted the recent surge higher, and recently this level was called upon again to offer some support and a soft landing, however the pound fell strongly through it on its way down to near 1.50. A couple of weeks ago, we saw some evidence that the decline had been slowed down as it traded around 1.52 for about a week whilst receiving solid support from around 1.5160. The last few weeks has seen the pound fall strongly and return almost all of its gains from the few weeks before that. About a month ago the 1.54 level provided a little piece of resistance and this level has since been broken as it offered limited support. Now that the pound has drifted back down below 1.54, it may provide some resistance again although presently it has some other levels to deal with beforehand.
Over the last month or so, the GBP/USD has been experiencing a variety of different levels which have played a role on the price action. Towards the end of March the GBP/USD was trading within a range roughly between 1.51 and 1.5250 and now on a couple of occasions it has been able to move outside that range and push higher. A few weeks ago, the 1.5350 level was one of significance as it offered resistance before the GBP/USD was able to move higher through to 1.56. In early March the pound moved to new lows around 1.4830 from a starting point near 1.64 at the beginning of the year. With the surge higher over the last couple of months, the GBP/USD had completely turned around its fortunes from earlier in the year, however it is starting to ease off and return most of the good work.
GBP/USD lost ground in Monday trading, as the pair has dipped below the 1.51 early in the North American session. The markets were closed in both the US and UK for a holiday on Monday, however there was still some activity from the pair, which continues to lose ground. After posting strong employment and housing numbers, the US wrapped up last week with strong manufacturing data. Core Durable Goods Orders jumped at 1.3%, easily beating the estimate of 0.6%. Durable Goods Orders kept pace with a 3.3% increase, well above the estimate of 1.6%. The markets were pleased that both indicators bounced back from declines in the previous month. We’ll get another look at the confidence level of US consumers, with the release of CB Consumer Confidence on Tuesday. 
GBP/USD May 28 at 02:40 GMT 1.5085 H: 1.5156 L: 1.5064
During the early hours of the Asian trading session on Tuesday, the GBP/USD was consolidating in a very narrow trading range right around 1.5110 after having recently found some support at the 1.51 level, however it has fallen sharply back down through the 1.51 level. Throughout the first part of this year, the pound fell very strongly from the key resistance level at 1.63 level down to levels not seen in two and a half years and has done well the last month to rally well and move back up above 1.56. Current range: Just below 1.5100.
Further levels in both directions:
• Below: 1.5000.
• Above: 1.5150, 1.5300 and 1.5600.
(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has moved back up above 50% after the GBP/USD has fallen down to the two month low near 1.51. Trader sentiment remains in favour of long positions.
Economic Releases
- 06:00 CH Trade Balance (Apr)
- 06:00 UK Nationwide House Prices (28th-31st) (May)
- 13:00 US S&P Case-Shiller Home Price (Mar)
- 14:00 US Consumer Confidence (May)