Sforex
Long

Cable: Large divergence will trigger a big move ?

FX:GBPUSD   British Pound/U.S. Dollar
166 0 6
We see on the chart there is a large divergence betwen price and main indicators. With price is lower lows and with indicator is higher highs. Theoretically, the result of this divergence is bullish for Cable.
I hope TA will not be wrong, but FA shows some signals for indecision.

Fundamental next week focus on BOE meeting on Wednesday ,Retail Sales on Thursday, and UK GDP on Friday, don't forget US CPI             on Wednesday.

Last week, we saw UK CPI             dropped to 1.5% from 1.9%. Inflation is going down shows that UK economy is losing momentum. Definitely, next BOE Meeting on Wednesday, they will keep neutral stance and the first rate hike is unknowable.Because of decline of CPI             , I think UK Retail Sales is very difficult to maintain uptick. While I think UK GDP will not change and keep at 3.0%, so economic data seem less support for Cable next week.

Shift focus to USD, with sharp decline of Oil             price, and the energy price fell agressively recent months absolutely would cause a pause for inflation . I think US CPI             on Wednesday at least is unchanged even negative.

In short, to choose a trend for GBPUSD             next week, I choose uptrend.

Pay attention on chart, you see the bearish trend line I show on the chart, any break the trend line will drag GBPUSD             higher, and RSI indicator, RSI broke the trend line , RSI would move higher ?. Technical Analysis show positive for Cable. I hope it will support for Cable.

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