The British pound was seen trading lower against the US dollar as the FX market sentiment remained in the favor of sellers. We need to see how the GBPUSD pair trades in the coming days, as the pair is about to create a bottom soon. However, as long as the pair is trading below a key resistance area of 1.5720 it remains at risk of more downside. So, we might look to enter into a sell trade in the short term.
There was a bullish trend line on the 4 hour chart, which was broken during this past week. This trend line might act as a resistance in the near term. There is also an important hurdle around the 1.5720-40 area. So, if the pair manages to move higher from the current levels towards the highlighted resistance area, makes a stop and forms a bearish divergence, then we can enter into a sell trade.
Initial target should be around the 1.5540 level, and final target could be around the 1.5480 level. Stop should be placed above the 1.5740 level.
Major events scheduled in the upcoming week
The US dollar continued to trade higher against the Euro and the British pound. The worst performer was the GBPUSD pair, which collapsed this week and traded lower below the 1.5700 level. The economic releases were mostly positive for the US dollar. However, there was a holiday in the US which prevented action in the near term. The EURUSD pair remained stable comparatively, but was under pressure this past week. There are several important economic releases lined up during this past week, which might cause heavy swing moves in the short term.
Let us look at all major events lined up in the upcoming week.
Sunday – Australia’s AIG performance of manufacturing index.
Monday – Euro zone manufacturing PMI, German manufacturing PMI, UK manufacturing PMI and US ISM manufacturing PMI.
Tuesday – RBA interest rate decision, UK construction PMI and US construction spending data.
Wednesday –Australian GDP, Swiss GDP, Euro area GDP, BOC interest rate decision and US fed’s beige book.
Thursday – BOE interest rate decision, ECB interest rate decision and US initial jobless claims.
Friday –US NFP, unemployment rate and Canadian employment data.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast
Happy trading friends!
