GBPUSD buyers enjoyed a nice up-move last week as GBPUSD traded as high as 1.6162. I think the pair is now presenting us an interesting sell opportunity as it might create a top soon, in my opinion. RSI is also at the extreme around 80 on the daily chart as shown below.
There can be two ways to trade GBPUSD. First, I think every rally can present a sell opportunity, and we can enter a sell trade from the levels such as 1.6120, 1.6140 and 1.6180. Alternatively, there is a rising trend line on the 4 hour chart as shown below, and if the pair moves down, breaks the trend line and support at around 1.5960, then we can enter a sell trade. We need a 4 hour close below the trend line and bearish candle pattern on the 1 hour chart before jumping into the trade.
Initial target should be around the next trend line and below the gap close as shown in the chart below, and final target could be daily 20 moving average. Stop should be placed above the previous weekly high in the first case and above the trend line in the second case.
Major events scheduled in the upcoming week
Last week was a major event risk week as Fed announced no change in the asset purchases, which came as a surprise to the market and major pairs like EURUSD, GBPUSD and AUDUSD jumped higher. Now, with each week, market would be focusing on the next Fed meeting outcome, and will weigh every fundamental data from the US accordingly.
Let us look at all major events lined up in the upcoming week.
Sunday – German Federal Elections.
Monday – Germany and Eurozone PMI composite figures.
Tuesday – US consumer confidence and President Obama’s Speech before UN General Assembly.
Wednesday – US Durable Goods Orders.
Thursday – UK GDP data and Fed’s Stein speech on monetary policy.
Friday – ECB President Draghi’s speech, Eurozone consumer confidence and Fed’s Evans and Dudley’s speech.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, EURJPY, GBPJPY, EURCAD, GBPCAD, AUDNZD and DOW JONES.
Get it HERE: Vladimir’s Markets Forecast
Have a great weekend friends. Enjoy!
