GBPUSD to extend trading ranges on the downside towards 1.6160

The US dollar jumped sharply against most other major currencies, including the British pound. The GBPUSD pair was seen trading lower towards the 1.6280 level. The most important point is that the pair has breached a critical support area, which might encourage the British pound sellers to take the pair lower in the short term. I think selling rallies is a good option moving ahead.

There was a bullish trend line and an important support around the 1.6350-40 levels, which was breached recently. This break is crucial and might ignite more losses in the pair. So, if the pair corrects a bit higher from the current levels, moves closer to the broken support area and makes a stop, then we can enter into a sell trade.

Initial target should be around the 1.6160 level, and final target could be around the 1.6120 levels. Stop should be placed above the last high.

Reviewing recent events and trades
The US dollar decimated almost every other currency recently, as the pairs such as EURUSD, GBPUSD, AUDUSD and NZDUSD traded lower. Yesterday, the US new home sales data was released, which registered a massive gain of 18%. This ignited sharp rally in the US dollar. Earlier during the Asian session, the market got the momentum and the EURUSD and NZDUSD pair moved further down. Overall, the US dollar buyers seem to be enjoying the ride, as the US dollar index traded above the 85.00 level.

Fundamental Outlook for the day
Today, there are a couple of important releases lined up during the NY session, including the US durable goods orders, initial jobless claims and services PMI data. If the outcome impresses again, then the US dollar might gain further traction in the short term. However, we need to be very careful as the EURUSD pair reaching important support area, which can produce a bounce in the pair. Moreover, the Japan’s CPI will be released during the next Asian session, which might cause some action in the yen pairs.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!