Near the end of yesterday’s North American session, I expressed that cable take another stab at the lows before moving higher. However, during the Asian session, the GBPUSD has been pivoting around the key 1.5750 large quarter point level instead of moving lower as expected. The 8hr candle close above that level signals that cable may, in fact, be done with the lows and move higher in today’s session.
With monetary policy unchanged and GBPUSD rallying, these are the Fibs that everyone is watching. However, I just don’t think this is a corrective rally. I’m looking for these Fibs to be broken.
Cable is weak headed into the Bank of England rate announcement. Interesting level where bulls have stepped in before but the market is obviously waiting on the central bank before pushing significantly in either direction. I’ve been biased for more correction into the red Fibs but I’m aware that we could push higher from here. 5 minutes until showtime!
Before the market open this week, I did hold a bearish bias on the GBPUSD. It would only change if price remained above 1.6250. It did. And the pair rallied to high of 1.6410. However, cable failed to remain above 1.6350. As a result, cable is trading lower at 1.6325 at the time of this writing. The 61.8% Fibonacci retracement level of Monday’s intraday price action at 1.6320 has been respected so far. However, the real level to watch on the news release is 1.6250. A break below and price heads towards the green zone. If price remains above, then it heads towards 1.6350 on its way to 1.6500. Ultimately, I remain a long-term bear until price trades above 1.6500. Trade what you see!
Despite the rally this week after finding support at 1.6250, cable was unable to take out the all important 1.6500 level. It was only a close above this level that turned the bounce off of the 1.5770 low into a true rally.
Alas, price failed at 1.6440 and we find ourselves back at the 1.6250. Previously, GBPUSD remained bullish as long as we had a 4-hour candle close above 1.6250. However, Thursday’s price action resulted in a candle that closed below the 1.6250 large quarter point. Though price remains above 1.6250 as of this writing, the pair has given a huge signal to further direction heading into US non-farm payrolls.
The EURGBP has managed to base at 0.8730 with a spike low at 0.8705. Buyers look ripe to step in at these levels if we do not get an hourly close below 0.8700. A failure targets first 0.8850 with an ultimate target of 0.8900. A break below targets 0.8680 with an ultimate target of 0.8600. News this week will be key with construction PMI out later this morning and Bank of England on deck for Thursday.
However, the market remains weary to strengthen the currency pair as the pair still fails to make a new high above 1.6200. The market awaits the release of UK retail sales. If better-than-expected expect cable to rally to 1.6250 which is also the 61.8% Fibonacci retracement level of this entire bear trend. I wouldn’t be surprised to get a break of this level to test 1.6300 if retail sales surprises to the upside. However, if retail sales disappoint expect a move back towards 1.6000 with a break opening up a further breakdown to this week’s downside targets.
Bounces out of 0.8720 as expected on its first attempt on the level in over a month. So far a high on the day at 0.8780 still repects the channel noted yesterday.
It seems we will get a bullish close on EURGBP above 0.8750 today. 0.8820/50 are key to the upside as we head into the BoE meeting minutes release. Watch for sellers to step in for a bigger move to the downside. A hold below 0.8850 confirms. Trade what you see!
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So so true. Wrap your mind around that one. Now figure out who you are and trade the person that YOU are. Not your mentor, not your gurus, not the experts, not your followers. Trade YOU. Only then can be become a successful trader and investor.
We are so excited to Welcome you to Euodoo Radio and our radio show “Trading Places”. We really believe that over the next few months you will return here again and again to find inspiration and insight into the world of professional trading. We have already a long list of interviews lined up for your listening pleasure. We hope you gain as much insight as we have from these exclusive interviews.
Our first recorded interview is with Lydia Idem Finkley, who is a well known personality on Twitter and who is an active Forex trader. Many of you may know her by her Twitter name @FaithMight and, if you know her, her market commentary is spot on. She also has a personal website and blog at www.faithmight.com. She works full-time, has a family and still finds time to trade. Many of us are in a similar situation and will find it interesting as she explains her style of trading that allows her to maintain her schedule.
Each week we plan to talk with major personalities and traders with a large sphere of influence in order to share their stories and their secrets for our benefit.
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~ Victor Sperandeo
Increase those odds through research, studying charts, planning trades, knowing who you are as a trader and continuously working on your trading style. No shortcuts, even in trading.
