The British pound traded higher against the US dollar yesterday after the positive manufacturing PMI. The GBPUSD stopped around the 1.6919 level, and moved lower. However, the bearish pressure is less for the pair. So, there are chances that the pair might climb again after a short-term retracement.
Looking at the 4 hour chart of the GBPUSD, there is a solid up-move trend line formed, which has held the downside in the pair a number of times. This trend line might act as a support again moving forward. So, if the pair retraces the recent gains in the short term and moves closer to the highlighted trend line, then we can jump into a buy trade. Remember, this trend line is also coinciding with the 61.8% fib retracement level of the last leg higher.
Initial target should be around the 1.6980 level, and final target could be above the 1.70 level. Stop should be placed below the trend line, as a break could take the pair lower further.
Reviewing yesterday’s events and trades
Yesterday, the market was relatively calm as most of the European market was closed. Later in the NY session, the US initial jobless claims, personal spending data and ISM manufacturing PMI data were published. The US initial jobless claims registered a sharp rise to 344K. On the other hand, the US personal spending and ISM manufacturing PMI came better than expected. The US dollar is trading a touch higher intraday, especially against the Euro and the Japanese yen.
Fundamental Outlook for the day
Today is an important day as the US nonfarm payroll and the unemployment rate will be published later during the NY session. The market expectations are quite high this time with NFP number is expected to come around 210K, and the unemployment rate is expected to fall from 6.7% to 6.6%. If the outcome comes positive, then the US dollar can gain some more ground going into the weekend, else it might drop heavily after the release if the data disappoints.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, USDJPY, NZDUSD, USDCAD and SILVER.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
