The GBPUSD is one of the best performing currency pairs in the recent times. The pair in the last week, dropped a touch lower towards the 1.6280/90 support level. The pair retreated from the resistance of 1.6460, as shown in the weekly chart shown below. The pair might be under some bearish pressure in the short term, but I think any major move lower may present us a buy opportunity during the week.
Looking at the daily chart of GBPUSD, the pair has two main trend lines. One is an up-move trend line and another one if the broken trend line. If the pair drops closer to these two trend lines, makes a stop and forms a bullish hidden divergence on the daily chart, then we may look to enter a buy trade later in the week.
Alternatively, if the pair does not move lower, then there is a down-move trend line and resistance at around the 1.6320 and 1.6350 levels, as shown in the 4 hour chart below. If the pair breaks higher and settles above this zone, then we may jump into a buy trade.
Initial target should be around the 1.6440 level, and final target could be at around the 1.6540 level. Stop should be placed below the up-move trend line on the daily chart for the first scenario, and below the broken support in the second scenario.
Major events scheduled in the upcoming week
This past week the market was relatively quiet, as there was no major movement noted. There were fewer economic releases for the US, including Federal budget balance data, retail sales data and PPI figures. The retail sales data registered a healthy gain of 0.7% in November, and PPI for the US remained at around -0.1% in November, as expected. The outcome was better, and as a result the US dollar traded a touch higher against most of the major currencies. EURUSD traded lower towards the 1.3700 support level.
Let us look at all major events lined up in the upcoming week.
Sunday – Chinese HSBC manufacturing PMI.
Monday – French manufacturing and services PMI, German manufacturing and services PMI, Euro zone manufacturing and services PMI and the US Treasury International Capital (TIC) Net Long-Term Transactions data.
Tuesday – UK’ CPI data, Euro zone CPI data, German ZEW economic sentiment and US CPI data.
Wednesday – German IFO Business climate index, UK employment data, US building permits data and Fed interest rate decision.
Thursday – UK retail sales data, US jobless claims and Existing home sales data..
Friday – GFK German consumer climate figure, UK GDP data, Canadian CPI data and US GDP figures.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: EURUSD, USDJPY, USDCAD, EURGBP, EURAUD, AUDUSD, AUDNZD, GBPCAD, EURCAD and INDICES.
Get it HERE: Vladimir’s Markets Forecast
Enjoy the weekend friends!
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