GBP/USD Daily: Rallying above Ichimoku Cloud, pushing up towards the 50% Fibonacci level
Technical Analysis
After breaking above 38% Fibonacci as predicted in my previous update, the GBP/USD is now skyrocketing towards the 50% Fibonacci on the forex dance floor. The RSI is heading up above the neutrality area. This could be the beginning of a Double Top forex chart pattern .
Fundamental Points
Beginning of the London Session, Average Earnings Index in the UK came in better than expected at 2.7% versus last quarter’s 2.3% which could be the force behind today’s early rally in Mr. British Pound.
In the UK City AM reported that David Cameron only won a vote on rules surrounding the EU referendum because Labour voters abstained. The paper is calling into questions the PM’s grip on his party after he backtracked on statements that ministers that do not toe the party line over the referendum would be sacked.
Today most of the market focus will be on what the Fed have to say about economic conditions and whether those words allude to a rate hike in the near future, or not. Markets have been told by the Fed to think for themselves about when a rate hike is likely, but with political pressures on the Fed to hold off on rate hikes there is more than just economics to consider. As such today’s FOMC announcement will be this week’s biggest news (unless Greece get kicked out before Friday).
Trading Idea
Followers of my previous update with a bullish position, exit at 1.58 as the pair may change direction right before 50% Fibonacci (our new pivot point)
Alternative Scenario: Below 1.5560 look for a reversal targeting 1.5180 and 1.49 in extension.
Where to set your stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5180 | 1.5560 | 1.58 |
| 1.49 | 1.5867 | 1.6175 |
*Important Note: The support and resistance levels are not suitable for all traders and largely depend on your account size, margin and leverage. Book a private lesson to learn how to personalize your account based on our trading guide.
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