As can be seen GBP/USD is bouncing about off the 76.4 Fibonacci and the 50.0 Fibonacci on the Hourly time frame (also the 61.8 Fib on the DTF).
The 100 sma on the 4HTF comes in at 1.6282 offering further support for the BULLS.
I’m still LONG from 1.6291 with a STOP at 1.6271. The 50 100 and 200 sma’s all now sit above the price and this will force downward pressure on the BULLS. The 61.8 Fib on the HTF comes in at 1.6341 further helping the BEARS.
USD Final GDP comes out at 13:30 GMT. This is likely to meet the 4.6% target so we may see GBP/USD drift between 1.6284 and 1.6409 until theses targets are met. A break of either will possibly set GBP/USD direction for the foreseeable future unless we get some weekend market moving news.
Well, after bouncing off the Fibs at 1.6409 and 1.6284 the BEARS won out in the end and forced the break south.
Its clear from this move that all the positive impetus gained from the Scottish NO vote has left the market and GBP has resumed its decline but I suspect this may not be for long.
The most likely area GBP/USD is headed over the next 24 hours is 1.6160 ( 1.6238 at time of writing).
This is a very strong triple support area (WS1, 23.6 Fibonacci, September 16 low).
Harmonic theory would suggest that the flock will target this area and we can expect to see a significant bounce if 1.6160 is reached.
1.6232 may offer some support for GBP/USD LONGS but if this level fails then it may be possible to SHORT GBP/USD from 1.6230 with a 1.6250 STOP.
I shall watch the 1m chart over the next half hour in the absence of news and look to SHORT GBP/USD.
No particularly significant direct GBP news out in the first part of this week apart from Current Account at 09:30 GMT Tuesday but the PMI numbers are due Wednesday Thursday & Friday and of course the big one on Friday - Non-Farm Employment Change and Unemployment Rate which could set GBP’s direction for the foreseeable future.
Fairly quiet action yesterday on GBP/USD and no trades.
In 20 minutes the quarterly Current Account numbers are printed. This is the difference in value between imported and exported goods. The print is expected to be -16.9B but its far more likely to be red numbers (missed target) than green numbers (exceed target) . Its difficult to say how much this print will affect GBP unless its a huge miss. My guess would be meet target or a narrow miss.
My favoured target remains 1.6161 where I’ll be looking to get LONG.
Price is 1.6264 currently so its unlikely to get to this area any time soon unless Current Account misses by miles.
The upside target of 1.6366 is equally distant and there’s nothing to suggest the BULLS can break through all the resistance ahead of them so unless Current Account changes the mood we may see GBP/USD consolidate for a few hours.
At 15:00 US Consumer Confidence needs to be watched.
After booking profits from a previous short trade on the 9/16 break of the 3-day high, I waited for the next break of the 3-day low and took it to go short again on 9/25 at 1.6283. Since then we have seen new lows in each session. The 9/30 session was 3 pips shy of a new 10-day low and as of this writing we are about 20 pips shy. With prices in the upward trend from 2013-JUL-09 to 2014-JUL-15 ranging from 300-900 pips above the 200-day moving average, the current price of about 490 pips below the 200-day moving average in a downward trend does not make me bullish (410 pips down from here would make this trend no less dramatic than that upward trend).
GBP/USD continues to meander sideways awaiting direction from Fridays NFP numbers. A green print for Construction PMI (exceeded expectation) has done little to move this pair. Elsewhere we’ve seen the USD generally weaker with the JPY leading the way but still G/U sits and waits.
Yesterday the 1.6163 I’d previously highlighted was touched again and price immediately moved back up to the 100 sma where the BEARS took over driving the price down to 1.6170 before the BULLS took the price back north.
Currently the price looks to be held between the 100 sma and double support at 1.6163.
My guess would be another attempt by the BEARS to take out 1.6163 which opens to door to 1.6043 but best advice is stand aside.
10/02 stopped 1 pip short of the 10/01 high for a teenie lower high and fell to a low that was 49 pips lower than 10/01 giving us a new 10-day low. My stop is just over the 3-day high with just 9 pips left at risk in the trade. If the 10/3 session stays below the 10/2 high I will be able to drop my stop to lock in about 25 pips.
NFP Expected 216k Actual 246K
Unemployment rate Expected 6.1% Actual 5.9%
Where do these numbers leave the market particularly GBP/USD?
As anticipated the BEARS took out 1.6049 but were repulsed at the 1600 big number/50.0 Fibonacci .
A LONG here (1.6022) would be highly risky and even though we may see the dollar give back some of its gains as a result of the better than expected NFP the overall picture is one of GBP weakness.
Best advice is to stay out of this market until Monday when we may get a clearer picture of where GBP/USD are headed over the next week.
GBP/USD has broken the key resistance at 1.600/50.0 fib and is headed south.
Chasing this break would be folly as oversold conditions dictate there will be a bounce. If we bounce back to 1.6000 this would be an excellent place to SHORT GBP/USD.
Best advice remains stay on the side lines to wait for the dust to settle.
Since 15th July GBP/USd has sold off steadily to 1.5951.
Will this sell off continue?
The answer to that is unclear currently but there are signs that over the near term GBP may rally.
The feel good factor of last Fridays better than expected NFP and Employment rate numbers seems to have deserted the USD which is clearly retreating across the board this morning.
My LONG GBP/USD from 1.5967 is still in play and although there are significant hurdles ahead GBP could be heading back north possibly to the 1.6138 area. We’ll know more once price takes out 1.6038 which is the first major hurdle (weekly 38.2 fib) - that’s if it does.
If, however, the BEARS re-enter this market and drive the price through 1.5951 then I’ll look to buy at 1.5847.
So if you’re trading today LONG from here (1.5982) with a STOP under 1.5951 (31 pip risk) may work in the absence of news.
For the more cautious look to SELL at 1.6183 with a 20 pip STOP depending on market conditions or BUY at 1.5847 with a 20 pip STOP.
Not much to add from yesterday. GBP/USD is consolidating in a 100 pip range. As long as we stay above 1.6023 then I favour the BULLS. The 1.6183 target area looks optimistic without some favourable GBP news and price may turn in the 1.6150 area if if gets there.
I’m still LONG from 1.5982 with a STOP at 1.6018 but best advice would be stand aside.
The expectation for yesterdays FOMC meeting was for the removal of references to the word “considerable” as in “considerable time”. This would imply rate increases were more “imminent” than “considerable”.
Not only did this not happen but references to “slow overseas growth” and “dollar strength” was enough for the dollar bulls to exit the market with much haste.
The effect of this was a surge in dollar short positions.
My GBP/USD LONG from 1.5982 was a huge beneficiary as a result.
As I send this GBP/USD has hit the resistance I mentioned earlier in the week at 1.6174 and the battle is joined here between the BEARS and the BULLS to either hold or break this area.
1.6196 is now key. If the BULLS can push higher than this level then 1.6281 is the next key resistance level.
Any GBP/USD LONGS should be held.
LONG from 1.6173 with a STOP 1.6147 could be taken.
