The British pound tumbled recently against the US dollar, but managed to hold the previous low. The UK CPI was released moments ago, which was broadly mixed. The GBPUSD might trade higher in the short term if it settles above an important resistance area. So, I think buying with a break looks like a good option in the near term.
There is a triangle pattern forming on the hourly chart of the GBPUSD pair, which might act as a catalyst for the GBPUSD buyers moving ahead. If the pair manages to settle above the same, then we can consider entering into a buy position once the pair retests the broken triangle resistance trend line. Remember, wait for a convincing break before entering into a trade.
Initial target should be around the 1.5750 level, and final target could be around the 1.5780 level. Stop should be placed below the broken resistance area.
Reviewing recent events and trades
Yesterday, the NY fed manufacturing index was released, which came as a disappointment. It fell below in the negative territory and registered a reading of -3.58, down from the previous reading of 10.16. This was negative for the US dollar as it traded lower. However, the next release in the US came as a relief, as the US industrial production registered a gain of 1.3%, whereas the market was expecting it to rise by around 0.7%. Moreover, the RBA meeting minutes were released earlier, which failed to lift the Aussie dollar.
Fundamental Outlook for the day
Today, the US building permits and housing starts data will be released during the NY session. The outcome might have an impact on the US dollar and if it misses the mark, then the dollar might trade lower. Moreover, the US manufacturing PMI will also be published, which is expected to rise from 54.8 to 55.2. Any disappointment might take the US dollar lower in the short term. Let us see how pairs like EURUSD and GBPUSD trades during the coming sessions.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
