GBPUSD'S WAR BETWEEN TECHNICALS AND FUNDAMENTALS!!
As the informal “deadline” for a Brexit deal draws nearer, sterling is becoming more attuned to headlines about the likelihood and structure of a deal. The UK’s relationship with its peers in the European Union is rapidly becoming the factor to watch when trading the pound.
FUNDAMENTALS
Therefore, it’s not surprising that GBP/USD has spiked following Monday’s headlines from chief EU Brexit negotiator Michel Barnier that an agreement is “realistic” in 6-8 weeks. A subsequent report from the Guardian that a Brexit summit was likely to be scheduled for mid-November added some meat to Barnier’s comments. While we’ve seen similar “false dawns” before, rhetoric and actions around a potential Brexit deal have taken on a distinctly positive tone – see GBP/USD Hits 3-Week Highs on Bullish Brexit Chatter) – raising the prospects of a GBP-positive deal in the coming weeks.
There are also a couple of economic developments to watch this week. Tuesday’s trade brings the monthly UK jobs report, with economists expecting +3.6k net new jobs and wages to rise at 2.5% year-over-year. Then, Thursday brings the BoE meeting, though having just raised its benchmark interest rate to 0.75% last month, little intrigue is likely.
TECNICALS
Technically speaking, GBP/USD has spiked above 1.30 on the headlines to peak above both its bearish trend line off the early May high and its 50-day moving average. A close near Monday’s highs will give bulls more confidence that the trend is indeed turning higher. In that case, the next level of resistance to watch will be the late-July highs and the 100-day moving average around 1.3200. Conversely, a failure to hold Monday’s breakout could lead a small dip, but the near-term rising trend line around 1.2900 should provide an intraday floor as long as Brexit rhetoric maintains its positive tone.
TECHNICALS OBSERVATIONS
1.We can see price breaking downwards the ichimoku clouds and staying to bearish environment.
2.We can also notice the downtrend line that price is fighting right now to establish which coincides with the EMA50.
3.Buying power is not so strong as the first spike up one week ago as we can see from the buying volume.
4.Price is under the EMA200 and shorts are favored.
5.We can see previous support turning in resistance and we may form a double top but still there is no RSI bearish divergence at the daily chart.
6.Here we are using the CM EMA TREND BEARS strategy to indicate the overall bearish trend and the current war between the trends at this consolidation we are having this last week.
POSSIBLE TRADES
SHORT TRADE
IF THE 1,3000 LEVEL BREAKS WE ARE LOOKING FOR 1,2900 AND 1,2850-1,2800 AREA IN EXTENSION
ENTRY AT 1,300-1.2990 LEVEL
BUY STOP AT 1,3060
TP1 1,2900
TP2 1,2850
TP3 1,2800
LONG TRADE
IF 1,3000 LEVEL HOLD
ENRTY LONG AT 1,3050
STOP LOSS AT 1,2990
TP1 AT 1,3100 LEVEL
TP2 1,3200 IN EXTENSION
HAPPY TRADING AND HAPPY PROFITS TO EVERYBODY!!
KEEP FOLLOWING FOR MORE PROFITS AND IDEAS!
PLEASE LEAVE A COMMENT OR A QUESTION YOU MAY HAVE!!
FUNDAMENTALS
Therefore, it’s not surprising that GBP/USD has spiked following Monday’s headlines from chief EU Brexit negotiator Michel Barnier that an agreement is “realistic” in 6-8 weeks. A subsequent report from the Guardian that a Brexit summit was likely to be scheduled for mid-November added some meat to Barnier’s comments. While we’ve seen similar “false dawns” before, rhetoric and actions around a potential Brexit deal have taken on a distinctly positive tone – see GBP/USD Hits 3-Week Highs on Bullish Brexit Chatter) – raising the prospects of a GBP-positive deal in the coming weeks.
There are also a couple of economic developments to watch this week. Tuesday’s trade brings the monthly UK jobs report, with economists expecting +3.6k net new jobs and wages to rise at 2.5% year-over-year. Then, Thursday brings the BoE meeting, though having just raised its benchmark interest rate to 0.75% last month, little intrigue is likely.
TECNICALS
Technically speaking, GBP/USD has spiked above 1.30 on the headlines to peak above both its bearish trend line off the early May high and its 50-day moving average. A close near Monday’s highs will give bulls more confidence that the trend is indeed turning higher. In that case, the next level of resistance to watch will be the late-July highs and the 100-day moving average around 1.3200. Conversely, a failure to hold Monday’s breakout could lead a small dip, but the near-term rising trend line around 1.2900 should provide an intraday floor as long as Brexit rhetoric maintains its positive tone.
TECHNICALS OBSERVATIONS
1.We can see price breaking downwards the ichimoku clouds and staying to bearish environment.
2.We can also notice the downtrend line that price is fighting right now to establish which coincides with the EMA50.
3.Buying power is not so strong as the first spike up one week ago as we can see from the buying volume.
4.Price is under the EMA200 and shorts are favored.
5.We can see previous support turning in resistance and we may form a double top but still there is no RSI bearish divergence at the daily chart.
6.Here we are using the CM EMA TREND BEARS strategy to indicate the overall bearish trend and the current war between the trends at this consolidation we are having this last week.
POSSIBLE TRADES
SHORT TRADE
IF THE 1,3000 LEVEL BREAKS WE ARE LOOKING FOR 1,2900 AND 1,2850-1,2800 AREA IN EXTENSION
ENTRY AT 1,300-1.2990 LEVEL
BUY STOP AT 1,3060
TP1 1,2900
TP2 1,2850
TP3 1,2800
LONG TRADE
IF 1,3000 LEVEL HOLD
ENRTY LONG AT 1,3050
STOP LOSS AT 1,2990
TP1 AT 1,3100 LEVEL
TP2 1,3200 IN EXTENSION
HAPPY TRADING AND HAPPY PROFITS TO EVERYBODY!!
KEEP FOLLOWING FOR MORE PROFITS AND IDEAS!
PLEASE LEAVE A COMMENT OR A QUESTION YOU MAY HAVE!!
Trade active
Trade active:
Price action has managed to overcome ichimoku cloud and bullish momentum has been verified at least untill next major resistamce level at 1,3250 level.
Comment:
Perfect short trade from level indicated by previous price action..
Trade closed: target reached