Daily Analysis: GBPUSD to accelerate gains above the 1.6690/1.6700 level

GBPUSD is one of the most interesting pairs in the recent times. The pair has managed to climb higher for the last couple of weeks. However, the pair has been declining for the last three days. I think the pair is on a verge of creating a bottom in the short term. The pair might continue to trade higher from the current levels if the upcoming retail sales data do not disappoint. So, I think we should be looking for buying opportunities.

Looking at the 4 hour chart of GBPUSD, there is a clear wedge formed. The pair might break higher, and then attempt to test the previous highs. So, if the pair breaks the wedge resistance at around the 1.6690/1.6700 level and close above the same, then we can jump into a buy trade. Remember, the pair can still move lower from the current levels. In that situation, we will step aside and analyze things later.

Initial target should be around the 1.6800 level, and final target could be above 1.6900 level. Stop should be placed below the broken wedge resistance level.

Reviewing yesterday’s events and trades
Yesterday, some key economic releases were scheduled in the European and NY session. During the European session, the German, French and Euro zone manufacturing PMI data was released. The outcome was somewhat on the disappointing side, as the figures released were lower than expected. This resulted in a decline in the EURUSD pair. The pair traded as low as 1.3682 yesterday. Furthermore, the US inflation data was released, which came in line with the expectations. This is helping the US dollar to regain some ground against the major currencies.

Fundamental Outlook for the day
Today, the Canadian inflation data will be released in the NY session. This is an important event for the Canadian dollar, as the currency has declined heavily in the recent times. So, keep an eye on this event if you are planning to trade the CAD pairs. Other than this, the US Existing home sales data will also be released. The market is not expecting any exciting figures, and as a result this can turn out to a non-event. Two Fed members, Bullard and Fisher will be speaking later in the NY session, which can cause some movements in the US. Not to forget that today is Friday. So, avoid any risky bets ahead of the weekend.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, USDJPY, USDCAD, AUDUSD, NZDUSD and EURAUD.
Get it HERE: Vladimir’s Markets Forecast

Have a nice weekend friends. Happy trading!

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