The British pound blasted higher during the previous Asian session after Mark Carney’s speech. The pair traded close to the 1.70 level earlier during the London session. It may continue to trade higher in the coming days, so every drop towards a support area could be seen as a potential buying opportunity.
There is an uptrend line forming on the hourly chart for the GBP/USD pair. There is also a support area around the 1.6920-10 level. One of two scenarios could potentially occur. First, we may enter into a buy trade around the mentioned support level if it holds. Alternatively, we can jump into a buy trade around the uptrend line on the hourly chart.
The initial target should be around 1.7080, and the final target could be around the 1.7140 level. A stop should be placed below the 1.6800 level.
Reviewing yesterday’s events and trades:
Yesterday, we mentioned that the Mark Carney speech could trigger some swing moves in the GBP/USD. The GBP/USD jumped more than 100 pips during the Asian session, as the central bank governor hinted at a possible rate hike ahead of the schedule. The EUR/GBP pair collapsed, as the euro was unable to match the gains made by the British pound. Moreover, the US dollar is trading lower, as the economic data released during yesterday’s NY session came in below expectations.
Fundamental outlook for the day:
Today, during the New York session, the US Producer Price Index (PPI) data and Michigan’s consumer sentiment will be published. The market expectations are not huge for the PPI. So, any better than expected reading might lift the US dollar in the short term. We are heading into the weekend, so I would not advise traders to jump into any risky trades, as we might have better opportunities next week.
- Vladimir Ribakov
Vladimir Ribakov is a professional independent Forex trader and mentor who established Vladimir’s Forex Signals & mentoring club as well as Vladimir’s Markets Forecasts Service and the Divergence University.
Website: http://www.vladimirforexsignals.com/
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