GBPUSD is trading inside a range for the last couple of days. I believe that the pair may trade higher again in the coming days. In December, the pair usually trades in a 350-450 pips range. In my opinion, the pair might range trade between the 1.6160 and 1.6550/1.6600 levels, as shown in the daily chart below. So, I think we should look for short term buy opportunities.
Looking at the 4 hour chart of GBPUSD, the pair is forming a wedge as shown below. If the pair climbs higher and manages to break this wedge, then we will look to enter a buy trade. Remember, we need the pair to break higher and close above the wedge to jump into a buy trade. Alternatively, if the pair does not move higher, then we will stay away and re-analyze the situation later.
Initial target should be around the 1.6520 level, and final target could be around the next resistance – 1.6680 level, as shown in the chart below. Stop should be placed below the 1.6300 support level.
Reviewing yesterday’s events and trades
Yesterday, a lot of fundamental data was released for the Euro zone and US. During the European session, Italian Spanish, French, German and Euro zone services PMI data was released. The outcome was better for Germany and Spain, and disappointing for Italy and France. Later, the UK’s services PMI figure was released, which missed the expectations of 62.0, and declined to 60.0. In the US session, ADP Nonfarm employment change data was released, which registered a healthy reading of 215K, beating the expectations of 173K. The US dollar traded higher against the AUD and NZD, but declined against the Euro and GBP.
Fundamental Outlook for the day
Today is an important day as Bank of England (BOE) and European Central Bank (ECB) interest rate decisions are scheduled later in the day. BOE is expected to keep the interest rates at 0.5% with no change in asset purchases. The ECB is also likely to keep the interest rates unchanged at 0.25%, but the focus would be on ECB President Draghi’s speech. Investors would be watching his speech closely in order to know more about the forward guidance from ECB, which can cause volatility in the market. Other than this, US GDP figure, Initial Jobless claims and real consumer spending data are also lined up later in the NY session.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, AUDUSD, USDCAD, GBPCAD, OIL and NASDAQ.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
