GBPUSD, 240 min

I suggested in my GBPUSD analysis at the end of March that we should look for shorts as the pair created a daily shooting star candle and fell outside the rising channel.  My trade idea was to look for sell signals inside sell area between 1.4395 and 1.4445 with target 1 at 1.4174-1.4214 and Target 2 at 1.4033-1.4085. The pair rallied to my sell area yesterday and produced a sell signal on the same day.

In my update I mentioned that the USD could be strong after the solid jobs report while the GBP is likely to remain weak due to Brexit concerns. I also said that the probabilities of GBPUSD hitting the target 2 are still there but as the pair is now near to the lower end of the range we might see some volatility before the target can be hit. The trade idea worked exactly the way I suggested. It’s pretty neat, when it happens as there obviously are also those trades that don’t go to the plan. Now both targets have been hit and depending on the strategy applied this trade idea produced between 150 to 350 pips.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

GBPUSD, Daily  

Today’s worse than expected production and trade data which shows the industrial and manufacturing sector to be in more of a funk than thought. Cable has given back most of the gains seen during an earlier run higher to 1.4141, retreating back under 1.4090.

UK industrial output unexpectedly fell by 0.3% m/m and 0.5% y/y, down from the 0.2% and 0.1% respective growth rates of January. The median forecasts had been for a 0.1% m/m rise and a 0.0% y/y outcome. Manufacturing data were even worse, contracting 1.1% m/m, while the February trade report showed the visible goods deficit to be GBP 12.0 bln after an upwardly revised January deficit of GBP 12.2 bln. It’s been no secret that the production sector has been the weak spot of the UK’s economy, and more timely survey evidence suggests this is a worsening trend. The risk of Brexit is a factor at play. A survey published by Deloitte this week found that a “fog of uncertainty has descended on the corporate sector” as a consequence of uncertainty about EU membership.

The negative data adds to the already negative sentiment and although the Brexit premium is priced in the one thing that markets HATE more than anything else is uncertainty.

Sub 1.4000 looks probable, however there is support around Thursday’s close of 1.4050. 1.3900 and 1.3860 remain key downside targets in the longer term. Short term we have 1.4050 proving support on the 4 hour and Daily chart. The previous support at 1.1410 appears to have broken down earlier this week.

Preference remains for more SHORT positions below 1.4105-1.4112 level with T1 back to 1.4050 and T2 1.3962. On the upside the pair will need to break 1.4200 and 1.4260 for long positions to be considered.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 GBPUSD hit Target 1 after the NFP report

GBPUSD, 240 min

I suggested in my GBPUSD analysis yesterday that we should look for shorts as the pair created a daily shooting star candle and fell outside the rising channel.  My trade idea was to look for sell signals inside sell area between 1.4395 and 1.4445 with target 1 at 1.4174-1.4214 and Target 2 at 1.4033-1.4085.

The pair rallied to my sell area yesterday and produced a sell signal. If you don’t know these signals and how to manage the risks in these trades please join me to my free webinars. Even though GBPUSD was already falling today’s US Job report finished the business by pushing the pair down to my target 1 area.

This trade produced over 160 pips from the entry signal to the target 1 for those that decided to close their positions in this target area. The second target area is additional 100+ pips lower from the current levels. The USD could be strong after this solid jobs report while the GBP is likely to remain weak due to Brexit concerns. Therefore the probabilities of GBPUSD hitting the target 2 are still there but as the pair is now near to the lower end of the range we might see some volatility before the target can be hit.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 GBPUSD Weak after daily shooting star

GBPUSD, 240 min

GBPUSD created a daily shooting star candle yesterday and fell outside the rising channel in today’s trading.  The pair is about to create a four hour shooting star candle which suggests that the sellers are rejecting the rally attempts to the area above 1.4400. In the daily chart the Stochastics is getting overbought while the weekly resistance level at 1.4500 is relatively close.

I am therefore looking for sell signals inside the above sell area between 1.4395 and 1.4445. Target 1 for successful short entries is at 1.4174-1.4214 and Target 2 at 1.4033-1.4085. Please, remember to apply risk appropriate management measures and come to our webinars to learn more should feel the need for further education.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

GBPUSD – 3 Months to the Brexit Referendum

Three months from today, June 23 2016, the UK votes on whether to remain a member of the European Union. A decision to leave could have a profound impact on the UK economy and the Great British Pound (GBP) in particular. FX markets hate uncertainty and continued volatility looks the norm for the next three months or until one side or the other in the Brexit (“British Exit”) debate takes a significant lead.

Earlier this month the BOE announced that it would make extra cash available to banks around the time of the referendum. The extra cash is designed to help the financial industry to keep ticking over during possible periods of market turbulence or when there might be a risk of a “credit crunch” Currency markets have already been rocked by fears that Britain could leave the 28-member bloc, with the GBPUSD dipping to seven and a half year lows.

So where now for GBPUSD? – Markets have pushed BoE tightening expectations out to Q1 next year, and have built in Brexit risk premium. The latest Poll of polls tracker has 43% in favour of remaining in the union, 41% wanting to leave and 16% undecided, little changed over the last couple of weeks.

The GBP was last surrounded with such political uncertainty in the run to the September 2014 Scottish Referendum. Now, like then, the assumption was the UK government would prevail. It did in 2014 but the vote was MUCH closer than opinion polls or the general public had anticipated. This time the two opposing camps start much closer and the momentum, with three months to go, lies with the UK out campaign.  The assumption is that many voters will settle for the status quo as the safe option. However, with the ruling Conservative party and government deeply divided on the issue (6 members of the cabinet, together with the highly influential Boris Johnson are campaigning for exit) and one cabinet member has actually resigned (although not directly over the Brexit debate), nothing can be taken for granted.

The tragic events in Brussels yesterday also added to GBP’s woes. We see continued depreciation for the GBP in the next three months. The news today reaffirmed our view, overseas investors will continue to reduce their holdings of UK assets, or continue to hedge those holdings because of the volatility and uncertainty surrounding the vote. The cost of hedging the GBPUSD increased by 14.50 percent today as the GBPUSD3M Option soared in value. This is the Option that covers the June 23 vote.

The Monthly Chart above shows the intact down trend with 1.3500 not unrealistic within the next three months.

Always trade with strict risk management and remember that your capital is the single most important financial aspect of your trading business.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

GBPUSD, 240 min

Sterling, which has been under across-the-board pressure, was given a toehold by better than expected UK labour data yesterday. GBPUSD lifted to a 1.4219 high today, which put in a little space from the five-year low that was clocked just ahead of the data release. The unemployment unexpectedly dipped to 5.1% y/y in November, down from 5.2% at the previous reading and the lowest since August 2005. This takes the jobless rate farther below the BoE’s non-accelerating inflation rate of unemployment (NAIRU) at 5.5%, though the average household income in the three months to November ebbed to 2.0% y/y from 2.4% y/y in the previous month. The data follows dovish guidance from BoE’s Carney, who yesterday said that now wasn’t the right time to tighten policy, but should help the pound find a footing after a period of pronounced underperformance.

On technical side the pair still looks weak. GBPUSD has dropped some 150 pips since my Tweet on the pair and has passed beyond my target. Important weekly support levels are not far away with the first one being at 1.4100 but this shouldn’t stop us from looking to sell the rallies as long as the market stays in a down trend. The 1.4232 – 1.4252 area has technical significance as it has a small Fibonacci cluster, a resistance level and 30 period SMA coinciding while the upper end of the bear channel isn’t that far either. If market rallies further the next potential level for short trades is between 1.4280 and 1.4300. We look for a rally to either of these levels and then sell signals to trigger short trades. Targets are: 1.4125 (T1) and 1.3850 (T2).

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

GBPUSD, Monthly

GBPUSD has been falling for several months as markets have been adjusting to changing interest rates landscape that has lately been favouring the USD over the pound. Markets have also been worried about the approaching referendum that could lead to Britain exiting the Eurozone. Polls have been suggesting that opinion is more evenly divided than previously thought, though the UK government is still negotiating with EU partners for better terms.

After hitting a 50 month SMA in June 2015 the pair has now fallen to levels that attracted buyers in April 2015. These levels have been turn around areas also in 2010 and indeed in 2009 when market created an important bottom over a three to four month period. In monthly timeframe Stochastics (7) is oversold while RSI (7) indicates is right at the threshold of the oversold level. The nearest resistance level at 1.511 almost coincides with the 23.6% Fibonacci retracement level at 1.5188. The next monthly support is at 1.4230.

GBPUSD, 240

The pair rallied some 200 pips yesterday and created a daily bullish pin bar candle in the process. This supports the view that GBPUSD is trading near a major support level. The rally was stopped at an intraday resistance area between 1.4636 and 1.4661. These levels coincided with the down sloping regression line. Stochastics (7) is getting overbought and market has reacted lower forming a bearish pin bar in the four hour chart. The 30 period simple moving average is not far from the 1.4661 resistance while the upper Bollinger Bands are currently near 1.47 together with the 50 period moving average.

GBPUSD, 60

The hourly chart reveals how GBPUSD has rallied above the bearish trendline that this week limited its rallies until yesterday’s rally penetrated it. Price is now trading above the 30 period SMA but is still below the resistance area at 1.4636-1.4661. The nearest important short term support area is at 1.4532-1.4574 which coincides with the down sloping trendline in the 60 min chart and the lower Bollinger Bands in the 4h chart. The next significant resistance is at 1.4807.

Conclusion

Market is trading at major support area and is therefore likely to be near to a stage when it starts consolidating before turning higher again. From a short term trader’s point of view such price action can provide opportunities in both directions. Critical levels in short term are 1.4530-1.4566 support and 1.4636-1.4661 resistance. If the pair can create a higher low at support and then push through the resistance there is room to move to 1.4807 while the next support below 1.4530 is at 1.44. Support area visible in 60 min chart (1.4532-1.4574) is now interesting after yesterday’s rally from the monthly support.  Short trades make sense (if sell signals appear) at above mentioned resistance area with the Target 1 at the supporting price bracket and Target 2 at 1.4467 while risk on the long side can be justified should price action provide us with relevant signals inside the same support area.  This would negate the need for Target 2 in the short side. In case a long trade gets triggered Target 1 is at 1.4636 and Target 2 at 1.4695. US Non-Farm Payrolls report is out in a couple of hours and should the actual number deviate strongly from the expectations markets could move beyond the nearest technical levels. We wait for the employment numbers and market reaction to them before considering opening new positions.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.