2019-11-11 • Updated
Sterling erased its post-election losses and rose to 1.3010 in the past week after the Bank of England Governor Mark Carney said on Wednesday that they may need to raise interest rates despite a weakening economy. It was a radical U-turn from its last week’s dovish commentary, so traders reacted accordingly. The pound got some additional support after British Prime Minister Theresa May won backing for her Brexit and austerity agenda thanks to decisive votes of the small Northern Irish party.
The current price action is clearly showing the characteristics of the bullish trending phase, but we would not recommend rushing into long trades in the near term. Britain enters a period of uncertainty negotiating its exit from the EU which should hurt the GBP. So, the US dollar will probably try to recoup its losses next week. The economic data coming from the US may help if the figures come out upbeat. There will be US manufacturing PMI, unemployment claims, jobless rate, average hourly earnings and, what is more important, NFP. You should also note in your diary the release of FOMC meeting minutes on Wednesday. The British pound might also be influenced by the data flow out of the UK. Manufacturing, construction, and services PMIs will be released at the beginning of the week. Then, you should particularly be focused on Friday’s economic releases (Halifax housing price index, manufacturing production and goods trade balance).
On the technical chart, GBP/USD reached 1.3030 but failed to climb higher. A break of support at 1.2920 (Thursday’s low) will allow us to target lower levels at 1.2865 (50-day SMA), 1.2795 (Fibo 23.6% traced from this year low). On the upside, the target at 1.3045/50 appears to be within reach. Only after the break of these levels, the pound will be able to rise higher.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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