GBPUSD traded higher this past week, and broke an important resistance at around 1.6260 level. The pair usually trades in a 250-300 pips range in December, as can be seen in the weekly chart shown below. This means we can take advantage of this pattern, and trade accordingly. I think we should look forward to buy dips in GBPUSD until the pair is trading above the key 1.6260/50 level.
Looking at the 4 hour chart of GBPUSD, the broken resistance may now act as a strong support for the pair. There is also an up-move trend line as plotted on the 4 hour chart shown below. If the pair drops lower, makes a stop at around the 1.6280/50 level and forms a bullish hidden divergence on the 4 hour chart, then we will jump into a buy trade.
Initial target should be around the 1.6360 level, and final target could be around the 1.6420 level. Stop should be placed below the key 1.6220/30 support region.
Major events scheduled in the upcoming week
This past week was a less volatile week, as there were less major economic data scheduled during the week, and the US market was also closed for two days due to the Thanksgiving Day. The data for the US released in the past week was mixed, as the pending home sales and CB consumer disappointed the market. On the other hand, Chicago PMI and Michigan’s consumer sentiment jumped higher to encourage the US dollar bulls. Overall, the US dollar lost a lot of ground against the Euro and pound, and gained some ground against the Aussie, New Zealand dollar and the Japanese Yen. This week will be an interesting one as we have a lot of important fundamental releases scheduled.
Let us look at all major events lined up in the upcoming week.
Sunday – Chinese HSBC manufacturing PMI.
Monday – German, Italian, French and Euro zone composite PMI data, US ISM manufacturing index and Fed’s chairman Ben Bernanke’s speech.
Tuesday – Australia’s retail sales data, RBA interest rate decision and UK’s construction PMI.
Wednesday – Australia’s GDP, French Services PMI, Italian Services PMI, German Services PMI, Euro zone composite Services PMI, Euro zone GDP, Euro zone retail sales data, US ADP Nonfarm employment change, US New home sales data and BOC interest rate decision.
Thursday – BOE interest rate decision, ECB interest rate decision and US GDP.
Friday – US NFP data, US unemployment rate and Canada’s employment change data.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, USDJPY, USDCAD, EURAUD, GBPAUD, EURNZD, NZDUSD, AUDNZD, GOLD and NASDAQ.
Get it HERE: Vladimir’s Markets Forecast
Enjoy the weekend friends!
