Weekly technical levels of the GBP/USD pair.

General idea about the pivot point.

• Resistance 3 and support 3 are considered to be clear indicators of the maximum range of extreme volatility, though it is possible to pass them through. Pivot lines work well in the sideways markets, as prices are most likely to be located between the resistance 1 and support 1 lines. Within a strong trend, the price is expected to be lower than the pivot point line and continue moving. If the breaking news released may affect the market, the price is likely to go straight through resistance 1 or support 1 and even reach resistance 2 and resistance 3 or support 2 and support 3. If the trend breaks resistance or support through, it is likely to result in a significant price movement. It is also referred to as breakout.

Pivot point formula:

• Pivot point = (high (previous) + low (previous) + close (previous)) / 3

Observations:

• We expect a new range about 160 pips this week.
• The key level will set at the level of 1.7103 which represents the weekly pivot point for July 21-25, 2014.
• The support of the GBP/USD pair has already set at 1.7016. Moreover, the weekly support 1 will set at the same level.
• If the trend fails to close below the level of 1.7010, it will be a good opportunity to buy above 1.7020 with the first target at 1.71. Then, it will be continued straight towards 1.7132.
• The price of 1.7103 is representing the weekly pivot point and 1.7191 is going to form a double top.