A bit of good news out of the UK made Mr. British Pound stronger this morning, while traders are eagerly awaiting the FOMC meeting results. Is that 50% Fibonacci level we talked about earlier this week on GBP/USD chart the game changer?
UK CPI data released yesterday fell back to 1.5% on the year in August, with the words of Mark Carney still ringing, provided the labor market continues to strengthen.
The UK average earnings index and claimant count change both came in better-than-expected this morning. We also got the Bank of England meeting minutes to add to the volatility, and despite it showing no rush to raise rates by the BOE, it looks like Pound traders focused on the positive unemployment data and GBP continued its rise that started in Asia session trading.
We still have one day to save Britain with the Scottish independence Vote I discussed in our British Pound Special.
Still traders are eagerly awaiting the FED statement where additional cuts to the bond buying program are widely expected. Fed Head Janet Yellen usually enjoys keeping market expectations in check, which suggests that she is likely to downplay hawkish forecasts during the press conference after the actual FOMC announcement. As always, she will probably remind everyone that the U.S. economy still has a long way to go before achieving full recovery and that policy adjustments will continue to be data-dependent.
The sentiment for today’s FOMC statement is generally upbeat, but these expectations have been priced in a long while back. Even if the Fed statement is as expected, there’s still a good chance that profit-taking could drive the dollar lower in the short term before reestablishing its longer-term trend.
As far as GBP/USD traders sentiment goes, the ratio of long to short positions on pound pairs calculated by the Speculative Sentiment Index shows most traders are bearish on the pound. We normally use this sentiment index as a contrarian indicator which gives us further bullish trading bias.
So there you have it: stronger GBP and weaker USD projections –> Rising GBP/USD anticipation.
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GBP/USD Daily: Rebounding above 50% Fibonacci
Invest Diva likes: Long positions above 1.6013 with targets at 1.6620 and 1.7000 in extension..
If pair goes nuts: Below 1.6013 look for further downside with 1.5742 and 1.5487 in extension
What’s up on the forex dance floor: After rebounding from a key resistance level at 50% Fibonacci’s 1.6013, as well as bullish reversal behaviour after a formation of a spinning top candlestick pattern, the pair is now heading up and just broke above the 38% Fibonacci level. The RSI is heading up towards the neutrality area.
Supports and resistances:
1.7000
1.6620
1.6013 pivot point
1.5742
1.5487
What are you thoughts on GBP/USD? Do you think we will get back on track with the previous uptrend? C’mon over to our Facebook page and let us know.
Intraday Forex Technical Levels
EUR/USD 4-hour: Consolidating.
Invest Diva Likes: Long positions above 1.2974 with targets at 1.3020 and 1.3142 in extension.
If Pair Goes Nuts: Below 1.2947 look for further downside towards 1.2917 and 1.2874.
What’s up on the Forex Dance Floor: The pair is on an overall downtrend but is now slightly moving up around the levels at 1.2947 within the Ichimoku’s cloud. The RSI is above the neutrality area.
Supports and Resistances
1.3142
1.3020
1.2974
1.2947 Pivot Point
1.2917
1.2874
USD/JPY 4-hour: Testing the resistance level at 107.36.
Invest Diva Likes: Long positions above 107.36 with targets at 107.50 and 108 in extension.
If Pair Goes Nuts: Below 106.9 look for further downside towards 106.72 and 106.34.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend but is now consolidating between the resistance level at 107.36 which was a previous support from back in November 2007 and 106.90 above the Ichimoku’s cloud. ?The RSI is above the neutrality zone. Market sentiment of one of the largest international brokers shows that 62% of traders are short the pair. Using this sentiment index as a contrarian indicator, the combination of the technicals and current sentiment gives a further bullish bias.
Supports and Resistances
108
107.50
107.36 Pivot point
106.9
106.72
AUD/USD 4-hour: Moving down.
Invest Diva Likes: Short positions below 0.9076 with targets at 0.9037 and 0.8981 in extension.
If Pair Goes Nuts: Above 0.9076 look for further upside towards 0.9135 and 0.9183.
What’s up on the Forex Dance Floor: The pair is now teasing the 23% Fibonacci level at 0.9076 above the Ichimoku’s cloud. The RSI is heading down, slightly below the neutrality area.
Supports and Resistances
0.9183
0.9135
0.9076 Pivot Point
0.9037
0.8981
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