GBP/USD: pound is recovering
23 January 2019, 09:14
| Scenario | |
|---|---|
| Timeframe | Intraday |
| Recommendation | BUY STOP |
| Entry Point | 1.2980, 1.3005 |
| Take Profit | 1.3072, 1.3100 |
| Stop Loss | 1.2950, 1.2929, 1.2915 |
| Key Levels | 1.2700, 1.2758, 1.2796, 1.2882, 1.2929, 1.2974, 1.3000, 1.3046, 1.3072, 1.3100 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 1.2920, 1.2895 |
| Take Profit | 1.2838, 1.2800, 1.2758 |
| Stop Loss | 1.2950, 1.2974 |
| Key Levels | 1.2700, 1.2758, 1.2796, 1.2882, 1.2929, 1.2974, 1.3000, 1.3046, 1.3072, 1.3100 |
Current trend
Yesterday, GBP rose steadily against USD, and GBP reached its previous two-month highs of January 17.
Investors are focused on Brexit. On Monday, Prime Minister Theresa May presented a backup Brexit plan, which was not much different from the rejected one. May proposed to seek further concessions from the EU on the Irish border and rejected the possibility of a repeated referendum. However, the EU authorities have stated earlier that they will not change the terms of the transaction. With the threat of "tough" Brexit, London can cancel the action of Article 50, which encourages investors.
UK labor market strong data support GBP. November Average Earning including Bonus in November (3 MoY) increased by 3.4%, exceeding market expectations (3.3%) and the inflation rate and reached a ten-year maximum. November Unemployment Rate fell from 4.1% to 4.0%.
Support and resistance
Bollinger bands grow on the daily chart. The price range is trying to expand but still limits the further instrument’s growth. MACD increases, keeping a weak buy signal (the histogram is above the signal line). Stochastic reverses upwards after a short decline. At the same time, it still indicates that GBP can become overbought in the super-short term.
The current readings of the indicators do not contradict the further development of the “bullish” trend in the short term.
Resistance levels: 1.2974, 1.3000, 1.3046, 1.3072, 1.3100.
Support levels: 1.2929, 1.2882, 1.2796, 1.2758, 1.2700.
Trading tips
Long positions can be opened after the breakout of 1.2974 or 1.3000 with the targets at 1.3072 or 1.3100. Stop loss is 1.2950 or 1.2929–1.2915.
Short positions can be opened after a rebound from 1.2974 and a breakdown of 1.2929–1.2900 with the targets at 1.2838–1.2800 or 1.2758. Stop loss is 1.2950–1.2974.
Implementation period: 2–3 days.
Yesterday, GBP rose steadily against USD, and GBP reached its previous two-month highs of January 17.
Investors are focused on Brexit. On Monday, Prime Minister Theresa May presented a backup Brexit plan, which was not much different from the rejected one. May proposed to seek further concessions from the EU on the Irish border and rejected the possibility of a repeated referendum. However, the EU authorities have stated earlier that they will not change the terms of the transaction. With the threat of "tough" Brexit, London can cancel the action of Article 50, which encourages investors.
UK labor market strong data support GBP. November Average Earning including Bonus in November (3 MoY) increased by 3.4%, exceeding market expectations (3.3%) and the inflation rate and reached a ten-year maximum. November Unemployment Rate fell from 4.1% to 4.0%.
Support and resistance
Bollinger bands grow on the daily chart. The price range is trying to expand but still limits the further instrument’s growth. MACD increases, keeping a weak buy signal (the histogram is above the signal line). Stochastic reverses upwards after a short decline. At the same time, it still indicates that GBP can become overbought in the super-short term.
The current readings of the indicators do not contradict the further development of the “bullish” trend in the short term.
Resistance levels: 1.2974, 1.3000, 1.3046, 1.3072, 1.3100.
Support levels: 1.2929, 1.2882, 1.2796, 1.2758, 1.2700.
Trading tips
Long positions can be opened after the breakout of 1.2974 or 1.3000 with the targets at 1.3072 or 1.3100. Stop loss is 1.2950 or 1.2929–1.2915.
Short positions can be opened after a rebound from 1.2974 and a breakdown of 1.2929–1.2900 with the targets at 1.2838–1.2800 or 1.2758. Stop loss is 1.2950–1.2974.
Implementation period: 2–3 days.
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