Sforex

Sterling: BOE Meeting, Payrolls and a reason to SELL at 1.5500

FX:GBPUSD   British Pound/U.S. Dollar
225 0 7
Last week, GPBUSD found support at 1.5240. The rally of Sterling is contributed by the US soft data not because UK data.

The fact is UK data is not better than US data, because lack of UK data so market chooses US data to react.

This week, with data from both US and UK, promise a high volatility of GBPUSD             .

- BOE Meeting on Thursday and Payrolls on Friday.

I talk BOE Meeting first. Data performance of UK last month indeed were very negative: CPI             , GDP, and Labor market data were very negative.

That why nearly and surely BOE Meeting on Thursday, BOE must choose to lean to dovish side to defense UK from effect of global slowdown.

Payrolls. This is a thorny problem to solve. Because of mixed data, I am so headache to forecast payrolls on Friday. I belieave payrolls couldn't be printed above 200k, labor demand reached peak, so we should not be overoptimistic. However, to beat the forecast 180k, it needs more clues to reinforce the view. Previous number was 145k, in myt opinion, I think payrolls cann't beat the forecast. I will post payrolls heatmap on Thursday in my page, so please follow my page for more detail.

My viewpoint is still SHORT GBPUSD             . The recent rally is a chance to SELL GBPUSD             at higher level.

- Technical Analysis

Strong support is at 1.5500 It's also SMA100

I see GBPUSD             bounced agressively from long term descending trendline I draw on the chart. 4 times of bounce proved this is a strong resistance.

In the context of mixed data, I think traders will not risk to drive Sterling breaks this trend line .

Kumo cloud still plays a role as a meaningful resistance. GBPUSD             hold below Kumo for two months.

Like I said, 1.5500 is the level I choose. I will SHORT at 1.5500 level.

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