Sforex
Long

IDEA FOR GBPUSD NEXT WEEK.

FX:GBPUSD   British Pound/U.S. Dollar
453 4 9
Fundamental Analysis:
Last week, there was a very important event we shouldn't ignore : Retail Sales of UK (MoM) rose to 2.6%. The data caused a big surprise for all forecasters because they thought that it just increased 0.4%.

This reinforces greatly on the recover of UK economy, and affect positively on FX pairs having GBP : bullish trend for GBP.

Last week, GBPUSD             was governed by US data. Good Retail Sales and CPI             of US driving GBPUSD             lower and touched key support level 1.63 and then bounced back from this level due to good retail Sales of UK.

This week, there is no major US economy data, so G/U will be governed by UK economic data : BoE Meeting, ILO Unemployment Rate, Average Earning on Wednesday.

BoC             said there are two reasons trigger raising Interest Rate are :
- Unemployment rate
- UK citizens             earning.

If Retail Sales is so positive, it quickly transfer its positive affect to umemployment rate and Average Earning.

UK people go shopping strongly, it means they have jobs and increase earning.

We have necessary conditions to BoC             raise interest rate, the problem is WHEN.

we don't expect BoC             will change monetary policy soon, but we expect they will more hawkish in their comments.

And this will drive GBPUSD             higher.

- Technical Analysis .
We saw there is a convergence pattern we draw on the chart.

There is a strong obstacle at 1.63 zone: Kumo cloud, SMA50 and EMA50. Price cannot break this key support. It need a catalyst enough strong to break this level. In this time, I don't see any clue or catalyst which could drive G/U from this level. G/U could find dynamic from FED taper, but now not time for it.

Hence, if I choose bullish trend for G/U, my next target is 1.6510

----- I will open LONG position .

LONG GBPUSD             at current price.

Target: 1.6510 .-- 90 pips form current price 1.6420

Stop Loss: 1.63

--

Limit order: BUY at 1.6375

Take profit: 1.65

Stop Loss: 1.6290
Hit Take profit 90 pips
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Could you explain how Kumo cloud is used?
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Sforex AlvaroALorite
Kumo cloud is a part of Ichimoku system.

Kumo is the long term resistance and support level.

- Price : above Kumo -- bullish trend.
- Price: below Kumo -- bearish trend.
- Price: inside Kumo -- undetermined trend -- price will fluctuate to escape Kumo -- it looks like a plane in the typhon : 1 fly higher to escape the typhoon or typhoon drag the plan fall down.
Reply
Cool, thanks. I use to use 3 color coded MAs, red downtrend, green uptrend, yellow no trend, but using Kumo cloud seems way more "clean" to the eye.
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