The British pound was seen trading lower during today’s London session, as the UK manufacturing production data which was released came softer-than-expected, and ignited a down-move in the GBPUSD pair. The pair has breached an important bullish trend line, which might result in more losses in the pair in the coming sessions. So, selling rallies might be a good idea in the short term.
As mentioned there was a bullish trend line on the 4 hour chart for the GBPUSD pair. There were several supports around the 1.7100 area, which were also coinciding with the mentioned trend line. This broken support area might act as a resistance for the pair. So, if the pair trades a bit higher from the current levels, trades closer to the mentioned resistance area and makes a stop, then we can enter into a sell trade.
Initial target should be around the 1.7040 level, and final target could be around the 1.6980 level. Stop should be below the 1.7150 level.
Reviewing yesterday’s events and trades
Yesterday, the German Spanish industrial production data were published during the London session. The outcome of both these events missed the forecast, and as a result the EURUSD pair traded lower. However, the pair later managed to recover the lost ground, and traded back above the 1.3600 level. Similarly, the GBPUSD pair dived earlier and later recovered the losses. The Canadian Ivey PMI was released during the NY session, which registered a massive decline, resulting in a move higher in the USDCAD pair.
Fundamental Outlook for the day
Today, there is no major risk events lined up during the NY session. Some of the low-risk events include, National Institute of Economic and Social Research (NIESR) gross domestic product (GDP) Estimate for the UK and the US JOLT’s Job openings data. Not much movement might happen during the day. However, the Chinese CPI data which will be released during the next Asian session might cause some swing moves in the market, as a higher than expected reading could boost the risk theme in the short term.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, EURCAD, AUDUSD, NZDUSD, EURJPY and USDJPY.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
