Sterling has been on the back foot lately for several reasons: strong USD, uncertain view of BOE tapering and more recently supply chain shortages (e.g. fuel crisis). In the week leading up to 8th October NFP, we were expecting some retracement in DXY which has translated to price correction for GBPUSD. Our view is that this pair will move towards 1.37216 which is the 0.618 FIB retracement of the 14th September high and the 29th September low.
On our 4H chart we can see price is attempting to breakout to the upside and there is a bull flag showing on lower timeframes. We are taking longs from this level and will add if the price closes above the trendline on lower TFs. Stops are below the recent intraday lows near 1.35800. Partial profits can be taken at the 50% retracement level at 1.36600.
Depending on the outcome of NFP, we will attempt to sell GBPUSD from the highs between 1.37200-1.37500 back to the recent support at 1.34100.
On our 4H chart we can see price is attempting to breakout to the upside and there is a bull flag showing on lower timeframes. We are taking longs from this level and will add if the price closes above the trendline on lower TFs. Stops are below the recent intraday lows near 1.35800. Partial profits can be taken at the 50% retracement level at 1.36600.
Depending on the outcome of NFP, we will attempt to sell GBPUSD from the highs between 1.37200-1.37500 back to the recent support at 1.34100.