GBPUSD – More downside to follow after short correction (extract from Weekly Market Forecast 10th of August 2014)

The British pound was one of the biggest losers during this past week, as it traded lower against the US dollar and the Euro. I think the GBPUSD pair should continue lower in the days to come. However, there is a chance of a short-term correction, which can be seen as a selling opportunity. So, let’s take a look what are the levels we should keep an eye for entering a position.

There was a critical support around the 1.6900 levels, which was broken earlier. Now, the same support could act as a tough resistance for the pair. So, if the pair corrects higher from the current levels or a bit lower levels, trades closer to the 1.6900 resistance level and forms a bearish divergence, then we can jump into a sell trade.

Initial target should be around the 1.6720 level, and final target could be around the 1.6650 level. Stop should be placed above the 1.6980 level.

Major events scheduled in the upcoming week
The US dollar continued its rise against most major currencies, except the Euro. The EURUSD pair managed to climb during this past week, and broke the 1.3400 resistance area to trade closer to the 1.3440 area. The US ISM non-manufacturing PMI was the highlight of this past week, as it registered an impressive reading, which helped the US dollar to a great extent. The GBPUSD pair was seen trading lower this past week, and it ended the week below the 1.68 support area, which can be considered as a negative sign. It would be interesting to see how the pair reacts in the coming days.

Let us look at all major events lined up in the upcoming week.
Sunday – No economic release.

Monday – Canadian housing starts data and Australia’s NAB business confidence.

Tuesday – Italian CPI, German ZEW economic sentiment, US federal budget balance and Australia’s wage price index.

Wednesday –Chinese industrial production data, German CPI, Spanish CPI, US retail sales data and New Zealand retail sales data.

Thursday – German GDP, Swiss PPI, Euro Zone CPI, Euro zone GDP and US initial jobless claims.

Friday –UK GDP, US PPI data, US NY empire state manufacturing index and Michigan consumer sentiment.

This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, GBPCHF, EURCHF, USDCAD, EURCAD, AUDCAD, AUDUSD, NZDUSD, AUDNSD, EURJPY, GBPJPY, OIL, WHEAT, CORN and INDICES.
Get it HERE: Vladimir’s Markets Forecast

Happy trading friends!