Hi friends,
Today we shall discuss about the trade opportunities we have for GBPUSD. There is a bullish divergence forming on the daily chart and 4 hour chart. The pair also has a down-move trend line and resistance around 1.6010 and 1.6020 as shown below. If the breaks this trend line and resistance, hold above it, then we can enter a buy trade for GBPUSD to target levels such as 1.6120 and 1.6180. Stop should be placed below the last low in this case.
However, if we look closely, then we may have better sell opportunity as well. There is a bearish hidden divergence on the weekly chart and 4 hour chart as well. GBPUSD has formed a pattern as shown below on the 4 hour chart. Channel formation and duplication of the move down can be seen. So, if the current channel is broken, then the pair may move down again. So, we will also be looking to sell GBPUSD on a move lower.
The pair has an up-move trend line on the 4 hour chart and support at around 1.5960. If the pair manages to break below this, then we will jump into a sell trade for GBPUSD.
Initial target in this case would be 1.5910 or 1.5880 (gap close) and final target could be the duplication level as shown in the chart below. Stop should be placed above the last high.
Reviewing Friday’s events and trades
Canadian employment data was released was released on Friday, which was measured better than expected as the unemployment rate dropped to 6.9% from 7.1%. Canadian dollar was seen bid going into the weekend. Other than this, Michigan consumer sentiment was also released, which declined to 75.2 from the previous reading of 77.5. Overall data was mixed and US dollar was seen on the back foot as US shutdown is still the major concern in the market. There was no major fundamental release yesterday, which kept the market quite.
Fundamental Outlook for the day
Due to the US shutdown, market is still in a risk-off mode as the safe heaven currencies are seen bid early in the Asian session. There are some plans of the congress to gather again to discuss the plans regarding the debt ceiling. On Sunday, Chinese inflation data was released, which came better than the expected. Today, there is no event scheduled in the NY session except NY empire state manufacturing index, which is expected to rise from 6.29 to 7.00. I do not expect any major movements in the market, unless some news is released regarding the debt ceiling deal.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: AUDCAD, AUDNZD, AUDUSD, NZDUSD and GOLD.
Get it HERE: Vladimir’s Markets Forecast
Wishing a good week friends. Happy trading!
