GBPAUD has been trading higher for the past couple of weeks. The pair is heading towards critical resistances at around the 1.8100 and 1.8300 levels, as shown in the monthly chart below. I think the pair might retrace some of the gain in the coming weeks. So, we should be looking for short to medium term sell opportunities.
Firstly, we should look forward to selling rallies in GBPAUD. If the pair climbs higher, makes a stop at around any of the mentioned resistances and forms a combination of bearish divergence on lower time frames, then we will jump into a sell trade. Alternatively, there is an up-move trend line on the 4 hour chart and a support at around 1.7920 as shown in the chart below. If the pair breaks this trend line and the most relevant support level and closes below it, then we will enter into a sell trade.
Initial target should be around the 1.7750 level, and final target could be around the next up-move trend line as plotted on the 4 hour chart shown below. Stop should be placed above the next major resistance for the first scenario and above the broken trend line and support level for the second scenario.
Major events scheduled in the upcoming week
This past week was a good one for the US in terms of the economic data which was released. The US Nonfarm payrolls, unemployment rate, ADP employment change and ISM manufacturing PMI data exceeded the expectations of the market. However, the US dollar was unable to capitalize from the data, and was not able to gain some momentum to the upside. The major such as EURUSD and GBPUSD traded higher in the past week. EURUSD traded as high as 1.3700 and GBPUSD too managed to retain the 1.6300 level.
Let us look at all major events lined up in the upcoming week.
Sunday – Chinese CPI and PPI data.
Monday – Swiss unemployment data, Swiss retail sales, German industrial production data and US CB employment trends index.
Tuesday – Australia’s NAB business confidence, Chinese industrial production data, Chinese retail sales data, UK’s production data and NFIB small business optimism figure for the US.
Wednesday – Japan’s core machinery orders data and German CPI data.
Thursday – RBNZ interest rate decision, Australia’s employment data, Euro zone industrial production data, US initial jobless claims and retail sales data.
Friday – Spanish CPI data, Swiss PPI data, Euro zone employment change figures, US core PPI and PPI data.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, USDJPY, EURJPY, GBPJPY, EURGBP, EURAUD, AUDNZD, USDCAD, GBPCAD, USDZAR, USDTRY, EURTRY, EURNOK, EURZAR, INDICES and GOLD.
Get it HERE: Vladimir’s Markets Forecast
Enjoy the weekend friends!
