The disappointing NFP payroll report sparked a bout of volatility across all markets making it difficult to execute scalping strategies. The GBPUSD reaction was relatively subdued and with a solid support level below and declining daily variation it may offer the best opportunity in the current market environment.
[B]Key Technical Levels[/B]
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The 38.2% Fibo extension of the 1.3657- 1.7052 rally is a solid support line which may limit downside risks. The level may also present a exit and entry level for traders to target. The GBP/USD isn’t an ideal scalping pair as it has been volatile, but recent price action has held for the most part in the 1.5760-1.600 range. The pair was also relatively quiet following the U.S. NFP report which may lead to an ideal period of low volatility that high frequency traders can exploit.
[B]Quantitative Metrics [/B]
The GBP/USD has seen its ATR start to contract again in recent days which could be a sign that the pair is about to settle into a longer term range. However, the widening Bollinger band is a concern and underlines the recent volatility that we have seen from Sterling crosses.
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[I]To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: <[email protected]>[/I]