Is the GBP on the edge of a cliff?As the British Pound approaches a major support level of 1.4000, we think it is akin to peering over the edge of a cliff.
With one of the worst headline inflation rates in the developed markets, crippling energy bills, and a newly elected government, the Bank of England (BOE) is in a place few would want to be in. As the next policy meeting date nears, the central bank is likely to raise rates. But by how much?
Too little, and inflation will remain a key issue weighing on the currency’s attractiveness compared to the USD. Too much, and consumers will be crushed with the already astronomical energy bills and rising loan re-payment, likely pushing the UK further into stagflation, something that central banks try to avoid.
Either way, pound traders are likely to be disappointed. And we have not even begun to mention the effects the energy bill cap might have on longer-run inflation.
The technical setup proves more interesting as the current price lies right on the 1.4000 level, a major support level, only ever breached once in 1984 and retested once in 2020. We think a clear break of this will likely lead the pound to fall harder as traders ride the downward momentum.
On a shorter timeframe, the pair is arguably trading in a descending channel. As current prices teeter on the lower channel band, a breakout at the downside could spell trouble, sending the pair lower.
There seems to be little in the way to slow the move lower for the GBPUSD pair as both macro headwinds and technical ones beat down the Pound lower against the USD. With the US Federal Reserve meeting on the 21st and Bank of England meeting on the 22nd of September, we expect higher volatility over the next few days, a snap lower could drive momentum traders to further extend the downside move.
Entry at 1.1450, stop at 1.17400. Target at 1.08000 and 1.06150.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
6BV2022 trade ideas
forecasting BRITISH POUND FUTURS 6B , IN 30 MIN Hello to all investors, according to my previous studies and according to my experience as a trader, I see a good investment opportunity with a high probability of success, the details are reflected in the graph
MICRO GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish rise
Resistance :1.1774
Pivot:1.1650
Support : 1.1497
Preferred Case: On the H4, with the price breaking the descending trendline and ichimoku cloud, we have a bullish bias that the price may rise from the pivot at 1.1650, where the current price and overlap resistance are to the 1st resistance at 1.1774 where the overlap resistance and 38.2% fibonacci retracement are.
Alternative scenario: Alternatively, price could drop to the support at 1.1497, where the 61.8% fibonacci retracement is.
Fundamentals: Although many data of GBP out today are lower than expectation, the drop of DXY has stronger impact on the price. Therefore, we hold a weak bullish bias.
Bullish Sterling going into next weekMonday we create the low of the week with the high impact news driver and see the high of the week on Thursday of Friday
Big bullish weekly candle I expect.
MICRO GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish rise
Resistance :1.1609
Pivot:1.1504
Support : 1.1445
Preferred Case: On the H4, with the price pullback from the support, breaking the descending trendline, combined with the fundamental news, we have a short term bullish bias that the price may rise from the pivot at 1.1504, where the current price is to the 1st resistance at 1.1609 where the overlap resistance and 38.2% Fibonacci retracement are.
Alternative scenario: Alternatively, price could drop to the support at 1.1445, where the swing low is.
Fundamentals: Halifax HPI m/m is out today, which is better than the expectation and previous data.
MICRO GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish rise
Resistance :1.1609
Pivot:1.1504
Support : 1.1445
Preferred Case: On the H4, with the price pullback from the support, breaking the descending trendline, combined with the fundamental news, we have a short term bullish bias that the price may rise from the pivot at 1.1504, where the current price is to the 1st resistance at 1.1609 where the overlap resistance and 38.2% Fibonacci retracement are.
Alternative scenario: Alternatively, price could drop to the support at 1.1445, where the swing low is.
Fundamentals: Halifax HPI m/m is out today, which is better than the expectation and previous data.
BRITISH POUND Futures (6B1!), H4 Potential for Bearish DropType : Bearish Drop
Resistance : 1.2016
Pivot: 1.1894
Support : 1.1781
Preferred Case: On the H4, with the price moving below the ichimoku cloud and moving within the descending trend line , we have a bearish bias that the price may drop from the pivot at 1.1894, which is in line with the 78.6% fibonacci retracement to the 1st support at 1.1781, where the swing low is.
Alternative scenario: Alternatively, price may rise to the 1st resistance at 1.2016, which is in line with the 38.2% fibonacci retracement .
Fundamentals: the retail sales data (0.3%) was out today, which is higher than the expected and previous (-0.2%), which is a positive signal of economy, therefore we could expect the drop momentum decrease recently.
BRITISH POUND Futures (6B1!), H4 Potential for Bearish DropType : Bearish Drop
Resistance : 1.2016
Pivot: 1.1894
Support : 1.1781
Preferred Case: On the H4, with the price moving below the ichimoku cloud and moving within the descending trend line, we have a bearish bias that the price may drop from the pivot at 1.1894, which is in line with the 78.6% fibonacci retracement to the 1st support at 1.1781, where the swing low is.
Alternative scenario: Alternatively, price may rise to the 1st resistance at 1.2016, which is in line with the 38.2% fibonacci retracement.
Fundamentals: the retail sales data (0.3%) was out today, which is higher than the expected and previous (-0.2%), which is a positive signal of economy, therefore we could expect the drop momentum decrease recently.
New GBP Futures Bullish AnalysisBrk abv support.
not bearish unless price breaks below 1.215
Tg 1.238
British Pound futures. Potential idea.CME:6B1!
👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢
👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴
⚠️ Important Notes:
1. Follow your risk management rules.
2. Timeframes: up to 1D
Micro GBPUSD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2287
Pivot: 1.2157
Support : 1.2077
Preferred Case: On the H4, with price moving above the ichimoku indicator and within the ascending channel , we have a bullish bias that price will rise from the pivot at 1.2157 where the pullback support and 50% fibonacci retracement are to the 1st resistance at 1.2287 in line with swing high resistance, 78.6% fibonacci retracement and 61.8% fibonacci projection .
Alternative scenario: Alternatively, price could break pivot structure and drop to 1st support at 1.2077 where the pullback support, 78.6% fibonacci retracement and 78.6% fibonacci projection are.
Fundamentals: The UK's Prelim GDP q/q and GDP m/m are anticipated to show a decline in economic activity. This gives us a bearish view on GBPUSD . We'll need to exercise caution for this setup because our fundamentals and technicals are not completely aligned.
Micro GBPUSD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2287
Pivot: 1.2157
Support : 1.2077
Preferred Case: On the H4, with price moving above the ichimoku indicator and within the ascending channel , we have a bullish bias that price will rise from the pivot at 1.2157 where the pullback support and 50% fibonacci retracement are to the 1st resistance at 1.2287 in line with swing high resistance, 78.6% fibonacci retracement and 61.8% fibonacci projection .
Alternative scenario: Alternatively, price could break pivot structure and drop to 1st support at 1.2077 where the pullback support, 78.6% fibonacci retracement and 78.6% fibonacci projection are.
Fundamentals: The UK's Prelim GDP q/q and GDP m/m are anticipated to show a decline in economic activity. This gives us a bearish view on GBPUSD. We'll need to exercise caution for this setup because our fundamentals and technicals are not completely aligned.
British Pound Futures (6B1!), H4 Potential for Bullish MomentumType : Bullish Rise
Resistance : 1.2286
Pivot: 1.2161
Support : 1.2047
Preferred Case: On the H4, with icpre moving along the ascending trendline and above ichimoku cloud , we have a bullish bias the price may rise from the pivot at 1.2161, where the 23.6% fibonacci retracement is to 1st resistance at 1.2286, which is in line with the 78.6% fibonacci retracement .
Alternative scenario: Alternatively, price could drop to the 1st support at 1.2047, which is in line with 50% fibonacci retracement .
Fundamentals: The interest rate in the UK is at 1.25% with the recent rate increases from the BoE failing to have an impact on slowing inflation growth, as the UK CPI stands at 9.1%, a 4-decade high. The BoE is under pressure to take on a more aggressive approach in setting future policy rates. Gov Bailey indicated that the BoE could increase interest rates by 50bps as it attempts to address the issue of persistent inflation .
British Pound Futures (6B1!), H4 Potential for Bullish MomentumType : Bullish Rise
Resistance : 1.2286
Pivot: 1.2161
Support : 1.2047
Preferred Case: On the H4, with icpre moving along the ascending trendline and above ichimoku cloud, we have a bullish bias the price may rise from the pivot at 1.2161, where the 23.6% fibonacci retracement is to 1st resistance at 1.2286, which is in line with the 78.6% fibonacci retracement.
Alternative scenario: Alternatively, price could drop to the 1st support at 1.2047, which is in line with 50% fibonacci retracement.
Fundamentals: The interest rate in the UK is at 1.25% with the recent rate increases from the BoE failing to have an impact on slowing inflation growth, as the UK CPI stands at 9.1%, a 4-decade high. The BoE is under pressure to take on a more aggressive approach in setting future policy rates. Gov Bailey indicated that the BoE could increase interest rates by 50bps as it attempts to address the issue of persistent inflation.
Micro GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2181
Pivot: 1.2061
Support : 1.1955
Preferred Case: On the H4, with prices moving within an ascending channel and above the ichimoku indicator, we have a bullish bias that price will rise from the pivot at 1.2061 where the pullback support is to the 1st resistance at 1.2181 where the overlap resistance, 61.8% fibonacci retracement and 127.2% fibonacci extension are.
Alternative scenario: Alternatively, price could break pivot structure and drop to the 1st support at 1.1955 where the pullback support, 50% fibonacci retracement and 61.8% fibonacci projection are.
Fundamentals: Due to the current political uncertainty in the UK, rampant inflation and relatively modest interest rate increases, we have a bearish bias on the GBPUSD . We'll need to exercise caution for this setup because our fundamentals and technicals are not completely aligned.
Micro GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2181
Pivot: 1.2061
Support : 1.1955
Preferred Case: On the H4, with prices moving within an ascending channel and above the ichimoku indicator, we have a bullish bias that price will rise from the pivot at 1.2061 where the pullback support is to the 1st resistance at 1.2181 where the overlap resistance, 61.8% fibonacci retracement and 127.2% fibonacci extension are.
Alternative scenario: Alternatively, price could break pivot structure and drop to the 1st support at 1.1955 where the pullback support, 50% fibonacci retracement and 61.8% fibonacci projection are.
Fundamentals: Due to the current political uncertainty in the UK, rampant inflation and relatively modest interest rate increases, we have a bearish bias on the GBPUSD. We'll need to exercise caution for this setup because our fundamentals and technicals are not completely aligned.
Micro GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2184
Pivot: 1.2061
1st Support : 1.1955
2nd Support : 1.1778
Preferred Case: On the H4, with prices moving within an ascending channel and above the ichimoku indicator, we have a bullish bias that price will rise to the pivot at 1.2061 where the swing high resistance and 61.8% fibonacci projection are. Once there is upside confirmation that price has broken the pivot , we would expect bullish momentum to carry prices to 1st resistance at 1.2184 where the swing high resistance,61.8% fibonacci retracement , 100% fibonacci projection and 127.2% fibonacci extension are.
Alternative scenario: Alternatively, price could drop to the 1st support at 1.1955 where the pullback support is. Should price break 1st support, we would have a bearish bias that price will drop to 2nd support at 1.1778 in line with swing low support and 100% fibonacci projection .
Fundamentals: BoE Gov Bailey commented that in order to bring UK inflation towards the 2% target, the BoE could consider more aggressive rate increases of 50bps. This gives us a bullish bias towards the GBPUSD forex pair.
Micro GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2184
Pivot: 1.2061
1st Support : 1.1955
2nd Support : 1.1778
Preferred Case: On the H4, with prices moving within an ascending channel and above the ichimoku indicator, we have a bullish bias that price will rise to the pivot at 1.2061 where the swing high resistance and 61.8% fibonacci projection are. Once there is upside confirmation that price has broken the pivot, we would expect bullish momentum to carry prices to 1st resistance at 1.2184 where the swing high resistance,61.8% fibonacci retracement, 100% fibonacci projection and 127.2% fibonacci extension are.
Alternative scenario: Alternatively, price could drop to the 1st support at 1.1955 where the pullback support is. Should price break 1st support, we would have a bearish bias that price will drop to 2nd support at 1.1778 in line with swing low support and 100% fibonacci projection.
Fundamentals: BoE Gov Bailey commented that in order to bring UK inflation towards the 2% target, the BoE could consider more aggressive rate increases of 50bps. This gives us a bullish bias towards the GBPUSD forex pair.
Micro GBP/USD Futures (M6B1!), H4 Potential for Bullish RiseType : Bullish Rise
Resistance : 1.2184
Pivot: 1.1957
Support : 1.1784
Preferred Case: On the H4, as prices has broken out of descending trendline and RSI moving along an ascending trendline, we have a bullish bias that price will rise from the pivot at 1.1957 in line with the pullback support to the 1st resistance at 1.2184 where the swing high resistance and 100% fibonacci projection are. Take note of intermediate resistance at 1.2069 where the swing high resistance and 50% fibonacci retracement are.
Alternative scenario: Alternatively, price may break pivot structure and drop to the 1st support level at 1.1784 in line with the swing low support and 100% fibonacci projection .
Fundamentals: The GBP released weaker than expected employment data, with average earnings at 6.2% (Forecast: 6.7%), and claimant count change at -20.0K (Forecast: -41.2K). However, the overall impact of the data was subdued for several reasons, the DXY is under pressure from a strong Euro , and the data was released earlier than scheduled, catching markets by surprise. This gives us a bullish bias for GBPUSD .
