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Forecast for Q2'16 - levels for GBP/USD - page 2

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Sergey Golubev, 2016.04.19 08:26

Technical Intra-Day Targets for GBP/USD by United Overseas Bank (based on the article)

GBP/USD: bullish breakout with 1.4347 as the target to be continuing

H4 price broke 100 SMA/200 SMA reversal area to above by good breakout: the price is testing 1.4347 resistance level for the bullish trend to be continuing, otherwise the price will be ranging within 1.4347 bullish resistance level and 1.4040 bearish support level. By the way, UOB is evaluating the trend for this pair as a neutral with 1.4000/1.4350 range:

"Improving short-term momentum suggests that a test of the top-end of our expected 1.4000/1.4350 range will not be surprising. However, the overall outlook is mixed and even a break above 1.4350 is not expected to move significantly above the late March high of 1.4455/60."

RSI indicator is estimating the ranging bullish trend to be continuing.  

  • If the price will break 1.4347 resistance level on close H4 bar so the primary bullish trend will be continuing.
  • If price will break 1.4040 support on close bar so the price will be reversed to the bearish market condition.
  • If not so the price will be ranging within the levels.


Resistance
Support
1.43471.4130
N/A
1.4040
  • Recommendation to go short: watch the price to break 1.4040 support level for possible sell trade
  • Recommendation to go long: watch the price to break 1.4347 resistance level for possible buy trade
  • Trading Summary: intra-day bullish reversal

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Sergey Golubev, 2016.04.19 17:48

GBP/USD Intra-Day Fundamentals: BoE Governor Mark Carney speech and 24 pips price movement

2016-04-19 14:35 GMT | [GBP - BoE Gov Carney Speaks]

[GBP - BoE Gov Carney Speaks] = The speech before the Lords Economic Affairs Committee, in London.

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GBP/USD M5: 24 pips price movement by BoE Governor Mark Carney speech news event :



  • If the price will break 1.4347 resistance level on close H4 bar so the primary bullish trend will be continuing.
  • If price will break 1.4040 support on close bar so the price will be reversed to the bearish market condition.
  • If not so the price will be ranging within the levels.


Resistance
Support
1.43471.4130
N/A
1.4040
  • Recommendation to go short: watch the price to break 1.4040 support level for possible sell trade
  • Recommendation to go long: watch the price to break 1.4347 resistance level for possible buy trade
  • Trading Summary: intra-day bullish reversal

The price broke 1.4347 resistance to above for good bullish breakout with +50 pips in profit for now:


Anyway, if we see from intra-day price movement for GBP/USD H4 for example so the bullish breakout is continuing with new target for now: 1.4418. It means the following: if the price breaks this level so the primary bullish trend will be continuing, otherwise - bullish ranging within the levels.


If we look at the daily price (GBP/USD D1) so this resistance level at 1.4418 is not significant one. WHy? because as we see from the chart below - this is bullish reversal breakout is going on for now on open daily bar:

  • Chinkou Span line is crossing the price to above for the breakout to be started (on open daily bar);
  • price is breaking Ichimoku cloud to above for the reversal from the primary bearish to the primary bullish market condition (on open daily bar too);
  • Absolute Strength indicator is estimating the bullish trend to be started in the near future;
  • if the new daily bar will be opened to be above 1.4347 level so this bullish breakout will be continuing up to 1.4513 as the nearest bullish target in this case.


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Sergey Golubev, 2016.04.20 09:16

Trading News Events: U.K. Jobless Claims Change (based on the article)

What’s Expected:



Even though the Bank of England (BoE) remains upbeat on the U.K. economy, signs of weak wage growth may encourage Governor Mark Carney to retain the record-low interest rate throughout 2016 as the central bank struggles to achieve its 2% target for inflation.

Nevertheless, the slowdown in global growth paired with easing outputs may drag on the labor market, and a dismal employment report may drag on the exchange rate as market participants push out bets for a BoE rate-hike.

How To Trade This Event Risk

Bullish GBP Trade: U.K. Job/Wage Growth Beat Market Expectations

  • Need green, five-minute candle following the print to consider a long GBP/USD trade.
  • If market reaction favors buying sterling, long GBP/USD with two separate position.
  • Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit.
Bearish GBP Trade: Jobless Claims, Average Hourly Earnings Disappoint
  • Need red, five-minute candle to favor a short GBP/USD trade.
  • Implement same setup as the bullish British Pound trade, just in reverse.
Potential Price Targets For The Release
GBPUSD Daily


  • Even though GBP/USD largely retains the downward trend carried over from late-August, the bullish divergence in the Relative Strength Index (RSI) may spur a larger correction especially as the pair appears to be carving an inverse head-and-shoulders patter in 2016.
  • Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
  • Interim Support: 1.3870 (78.6% expansion) and 1.3960 (50% expansion)

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Sergey Golubev, 2016.04.20 10:49


GBP/USD M5: 27 pips range price movement by U.K. Jobless Claims Change news event :




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Sergey Golubev, 2016.04.21 08:16

Trading the News: U.K. Retail Sales (based on the article)

What’s Expected:


Even though BoE warns that the next policy move will be to normalize monetary policy, the Monetary Policy Committee (MPC) may stick to the sidelines ahead of the U.K. Referendum in June, and the central bank may look to carry its accommodative policy stance into 2017 amid the uncertainty surrounding the economic outlook.

However, sticky wage growth paired with hopes for a stronger recovery may boost private-sector consumption, and a rebound in retail spending may put increased pressure on the BoE to normalize policy sooner rather than later as Governor Mark Carney sees a risk of overshooting the 2% inflation-target over the policy horizon.

How To Trade This Event Risk

Bearish GBP Trade: Retail Sales Falls Another 0.3% or Greater

  • Need red, five-minute candle following the GDP report to consider a short British Pound trade.
  • If market reaction favors bearish sterling trade, short GBP/USD with two separate position.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit.
Bullish GBP Trade: Household Spending Tops Market Forecast
  • Need green, five-minute candle to favor a long GBP/USD trade.
  • Implement same setup as the bearish British Pound trade, just in reverse.
Potential Price Targets For The Release
GBPUSD Daily



  • The bullish formation on the Relative Strength Index (RSI) may highlight a bottoming-process especially as GBP/USD appears to be carving an inverse head-and-shoulders formation from the end of 2015, but the pair may continue to face range-bound prices as the U.K. Referendum clouds the economic outlook for the U.K.
  • Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
  • Interim Support: 1.3870 (78.6% expansion) and 1.3960 (50% expansion)

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Sergey Golubev, 2016.04.21 10:43

GBP/USD Intra-Day Fundamentals: U.K. Retail Sales and 10 pips price movement

2016-04-21 08:30 GMT | [GBP - Retail Sales]

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - Retail Sales] = Change in the total value of inflation-adjusted sales at the retail level.

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  • "Continuing a sustained period of year-on-year growth, the volume of retail sales in March 2016 is estimated to have increased by 2.7% compared with March 2015. This was the 35th consecutive month of year-on-year growth."
  • "The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, showed growth for the 28th consecutive month, increasing by 0.8%."
  • "Compared with February 2016, the quantity bought in the retail industry is estimated to have decreased by 1.3%."
  • "Average store prices (including petrol stations) fell by 3.0% in March 2016 compared with March 2015, the 21st consecutive month of year-on-year price falls."
  • "The amount spent in the retail industry decreased by 0.1% compared with March 2015 and decreased by 1.3% compared with February 2016."

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GBP/USD M5: 10 pips price movement by U.K. Retail Sales news event :



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Sergey Golubev, 2016.04.27 11:17

GBP/USD Intra-Day Fundamentals: U.K. Gross Domestic Product and 30 pips price movement

2016-04-27 08:30 GMT | [GBP - GDP]

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - GDP] = Change in the inflation-adjusted value of all goods and services produced by the economy.

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  • "Change in gross domestic product (GDP) is the main indicator of economic growth. GDP is estimated to have increased by 0.4% in Quarter 1 (Jan to Mar) 2016 compared with growth of 0.6% in Quarter 4 (Oct to Dec) 2015."
  • "Output increased in services by 0.6% in Quarter 1 (Jan to Mar) 2016. The other 3 main industrial groupings within the economy decreased, with production falling by 0.4%, construction output by 0.9% and agriculture by 0.1%."
  • "GDP was 2.1% higher in Quarter 1 (Jan to Mar) 2016 compared with the same quarter a year ago."
  • "In Quarter 1 (Jan to Mar) 2016, GDP was estimated to have been 7.3% higher than the pre-economic downturn peak of Quarter 1 (Jan to Mar) 2008. From the peak in Quarter 1 (Jan to Mar) 2008 to the trough in Quarter 2 (Apr to June) 2009, the economy shrank by 6.1%."

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GBP/USD M5: 30 pips price movement by U.K. Gross Domestic Product news event :



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Sergey Golubev, 2016.05.03 10:42

GBP/USD Intra-Day Fundamentals: U.K. Manufacturing PMI and 33 pips price movement

2016-05-03 08:30 GMT | [GBP - Manufacturing PMI]

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

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  • "April saw the seasonally adjusted Markit/CIPS Purchasing Managers’ Index® (PMI®) fall below the criticalno-change mark of 50.0 for the first time since March 2013. At 49.2, from a downwardly revised reading of 50.7 in March, the headline index was dragged lower by  lacklustre trends in production and new orders and declines in both employment and stocks of purchases."     
  • "The weakening performance of the manufacturing economy was mainly felt in the consumer and investment goods sectors, with both registering declines in production and new work received. Although the intermediate goods sector managed to sustain growth of output and new order inflows, rates of expansion were weaker than in the prior month."

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GBP/USD M5: 33 pips price movement by U.K. Manufacturing PMI news event :



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Sergey Golubev, 2016.05.08 08:46

Fundamental Weekly Forecasts for Dollar Index, USD/JPY, GBP/USD, USD/CNH, NZD/USD, AUD/USD and GOLD (based on the article)

GBP/USD - "The big question for the rate decision is whether or not we see a break from the bank’s unanimity in April when the MPC voted 9-0 in favor of holding rates at .5%. Should we see a dissenting vote in favor of cutting rates, we could see some Sterling weakness, although even that may be mitigated given how quickly matters may change in the next six weeks."




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