Upward bias in GBPUSD after mild profit taking

The British pound remains one of the best-performing currencies lately. It has recently created a new multi-year high above the 1.7150 level against the US dollar. Currently, the pair looks like is under retracement, which could take the GBPUSD pair a bit lower from the current levels. However, these retracements might present us a nice buying opportunity.

There is a bullish trend line on the 4 hour chart for the GBPUSD pair. There are several supports around the 1.7100 area, which are also coinciding with the up-move trend line. So, if the pair corrects from the current levels, trades closer to the mentioned support area and forms a divergence on the lower timeframe, then we can jump into a buy trade. Remember, the pair must not hold the trend line and support area for this trade to be valid.

Initial target should be around the 1.7170 level, and final target could be around the 1.7220 level. Stop should be below the trend line and support area.

Reviewing yesterday’s events and trades
Yesterday, the US ADP nonfarm employment change data was released, which registered an impressive reading of 281K. This resulted in a move higher in the US dollar. The pairs like USDCHF and USDJPY were seen trading higher during the NY session. Earlier during the Asian session, the Australian dollar traded lower post two important events – retail sales data and the RBA Governor’s speech. The retail sales data came as a disappointment and initiated a down-move in the AUDUSD pair.

Fundamental Outlook for the day
Today, there are a lot of risk events scheduled during the London and the NY session. First, the ECB interest rate decision and the ECB press conference are lined up, which could ignite a lot of volatility in the EURUSD pair. Later, the US NFP data and the unemployment rate will be published. The market is expecting a stable reading this time. If the outcome stays in line with the expectations, then the US dollar could gain in the coming sessions. Both these events might increase the volatility in the market. So, it is important not to initiate any risky bets ahead of these events.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURJPY, EURGBP, USDCAD, AUDUSD and OIL.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!