EURGBP, Daily
On Monday (September 12th) I wrote “The EURGBP created a Hammer candle low on Tuesday (September 6) at 0.8332 from the recent high (August 12) at 0.8723. Two strong up days last week, through the 23.6 Fibonacci level and a touch of the 50 DMA and 38.2 Fib level spiked my interest on Friday. A close above the 0.8360 level on the Daily candle would generate a LONG position from here. Target 1 would be 0.8540 and Target 2 0.8624”
The trade hit Target 1 yesterday (September 14) for an 80 pip gain; this was the third of the three SHORT GBP positions to complete this week for a net gain of 375 pips.
The BOE,as widely anticipated made no change. Sterling is down by an average 0.3% on the day versus the G3 currencies, although off intraday lows. Despite the less pessimistic tone of the MPC minutes relative to August, policymakers stuck to forecasts for economic slowdown. The minutes noted that “a majority of members expect to support a further cut … at one of the MPC’s forthcoming meetings during the course of this year” — if, that is, the outlook at the November forecast round “is judged to be broadly consistent” with the August Inflation Report projections. The BoE are likely to remain on hold into 2017, seeing some sustainability in the recent economic revival and with the MPC likely to wait for the detailing of expected fiscal stimulus measures at the government’s mid-government budget review on November 23. Further out, there is risk of further easing measures, anticipating that the eventual commencement of exit negotiations with the EU will sharpen concerns about the near- to medium-term success of project Brexit.
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
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