Fundamental Analysis:
Today there is a major monetary policy change in England. Mark Carney, governor of the Bank of England, announced to halt Funding for Lending (FLS). This is an important change proved that BoE begins to tighten their monetary policy.
www.cnbc.com/id/101234117
G/U reacted immediately , broke key resistance 1..63 and now is 1.634.
I thought that G/U couldn't break this key resistance if market doesn't provide important data. Now I see the watershed data.
Economic data of England now prove recovery steadily : GDP, Labor market, Housing market are very positive.
Next week, I will consider two important events regarding to GBP:
- BoE Asset Purchase Facility on Thursday
- BoE Interest rate Decision on Thursday.
BoE said that they will not raise up interest rate hastily. They want to see the income improvement of British and the unemployment rate is below 7% so I think BoE will keep Interest Rate now. But Asset Purchase Facility is important information must be considered. If BoE Asset Purchase Facility decrease, it is a leading indicator shows that BoE gradually tighten monetary policy.
So if Asset Purchase Facility unchange or increase : G/U goes down, and if it decrease : G/U soars higher.
However, next week is a very important week for the greenback. All economic data about labor market of US will be published next week.
- ADP Employment change on Wednesday
- ISM Non-Manufacturing PMI on Wednesday
- NFP on Friday
- Unemployment Rate on Friday.
If those data are good or positive : G/U will reverse bullish trend, retrace below 1.63 level.
I consider each case:
- Case 1: BoE unchange interest rate , keep Asset Purchase Facility,, no more hawkish comments.
NFP is bad. ----->; G/U soar to 1.647 level even higher.
Case 2 : BoE unchange interest rate , keep Asset Purchase Facility,, no more hawkish comments.
NFP is good ---->; G/U retraces to 1.62
Case 3: BoE unchange interest rate , decrease Asset Purchase Facility, more hawkish comments.
NFP is bad ---->; G/U soars to 1.647 level even higher
Case 4: BoE unchange interest rate , decrease Asset Purchase Facility, more hawkish comments.
NFP is good ----->; G/U retraces to 1.62 but after that, it also rises up to 1.647
In the long term, no matter what NFP is good or bad, I still believe G/U would test 1.647 level because recent time hawkish speeches from BoE absolutely drive G/U higher and higher unless FED provides clue about taper.
If FED still keep silent about Taper, unchange their monetary policy, inject 85 billion dollar into US economy, G/U must be higher.
Technical Analysis:
- G/U now is on 1.618 Fib extension level I show on the chart. But there is divergence between price and stoch indicator. Traders most likely recognize this.
Choose SELL or BUY depend on what you think about market.
In my opinion, I will choose BUY. G/U soars to 1.647. This is also old resistance level I show on the chart.
Good Luck all traders. happy Thanksgiving Day. If you like my analyses. Please follow me an try apps: play.google.com...re/apps/details?id=sforex.... . Thanks.
Today there is a major monetary policy change in England. Mark Carney, governor of the Bank of England, announced to halt Funding for Lending (FLS). This is an important change proved that BoE begins to tighten their monetary policy.
www.cnbc.com/id/101234117
G/U reacted immediately , broke key resistance 1..63 and now is 1.634.
I thought that G/U couldn't break this key resistance if market doesn't provide important data. Now I see the watershed data.
Economic data of England now prove recovery steadily : GDP, Labor market, Housing market are very positive.
Next week, I will consider two important events regarding to GBP:
- BoE Asset Purchase Facility on Thursday
- BoE Interest rate Decision on Thursday.
BoE said that they will not raise up interest rate hastily. They want to see the income improvement of British and the unemployment rate is below 7% so I think BoE will keep Interest Rate now. But Asset Purchase Facility is important information must be considered. If BoE Asset Purchase Facility decrease, it is a leading indicator shows that BoE gradually tighten monetary policy.
So if Asset Purchase Facility unchange or increase : G/U goes down, and if it decrease : G/U soars higher.
However, next week is a very important week for the greenback. All economic data about labor market of US will be published next week.
- ADP Employment change on Wednesday
- ISM Non-Manufacturing PMI on Wednesday
- NFP on Friday
- Unemployment Rate on Friday.
If those data are good or positive : G/U will reverse bullish trend, retrace below 1.63 level.
I consider each case:
- Case 1: BoE unchange interest rate , keep Asset Purchase Facility,, no more hawkish comments.
NFP is bad. ----->; G/U soar to 1.647 level even higher.
Case 2 : BoE unchange interest rate , keep Asset Purchase Facility,, no more hawkish comments.
NFP is good ---->; G/U retraces to 1.62
Case 3: BoE unchange interest rate , decrease Asset Purchase Facility, more hawkish comments.
NFP is bad ---->; G/U soars to 1.647 level even higher
Case 4: BoE unchange interest rate , decrease Asset Purchase Facility, more hawkish comments.
NFP is good ----->; G/U retraces to 1.62 but after that, it also rises up to 1.647
In the long term, no matter what NFP is good or bad, I still believe G/U would test 1.647 level because recent time hawkish speeches from BoE absolutely drive G/U higher and higher unless FED provides clue about taper.
If FED still keep silent about Taper, unchange their monetary policy, inject 85 billion dollar into US economy, G/U must be higher.
Technical Analysis:
- G/U now is on 1.618 Fib extension level I show on the chart. But there is divergence between price and stoch indicator. Traders most likely recognize this.
Choose SELL or BUY depend on what you think about market.
In my opinion, I will choose BUY. G/U soars to 1.647. This is also old resistance level I show on the chart.
Good Luck all traders. happy Thanksgiving Day. If you like my analyses. Please follow me an try apps: play.google.com...re/apps/details?id=sforex.... . Thanks.