The GBPUSD weekly close below the big psychological number 1.2500 indicates the bulls are not so much in control of this market. We can note that over the last few weeks GBPUSD has established a wide trading range between 1.2700 resistance levels and 1.2400 support levels. Going forward, we can expect more of the same from the GBPUSD price action. The stochastic indicator is already in oversold territory which means that we can see a bounce from support level 1.2400. Only a decisive break above last week high 1.2582 will warn us that GBPUSD is ready for more upside.
The UK economic calendar will bring the usual talk around the Brexit which can be the catalyst for a spike in volatility. Other than that we have the UK CPI inflation figures which based on the market consensus are expected to inch higher from 1.6% up to 1.9%. The weaker GBPUSD exchange rate feed into the higher inflation prospect for the UK economy. The Fed Chair Yellen is also due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC which is highlighted to be a major risk event.
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