GBPUSD Double Bottom Formation | Jackson Hole Economic Symposium
GBPUSD Double Bottom Formation
We might be looking at a brand new GBPUSD Double Bottom Formation after the pair bottomed out as I predicted last week. Meanwhile and big guys in finance from around the world are enjoying a gathering in Jackson Hole, not to party like a rock star, but to discuss global economy. Let's take a closer look into the economic calendar and analyze the $h!t out of Mr. British Pound.
GBPUSD Double Bottom Formation | Technical Analysis
As Invest Diva predicted last week the GBP/USD pair seems to have bottomed out at the support level of 1.2870 and currently is aiming for the neckline of an apparent double bottom chart pattern on the daily chart at 1.3350. This level also serves as a short-term bullish target, which also happens to fall on the 23% Fibonacci retracement level, making it hard to break.
Upon confirmation of the GBPUSD Double Bottom formation, our next bullish signal will only go off if the pair breaks the neckline.
Our extended resistance levels are set at 1.36250 and 1.3860, right in the Middle of the Ichimoku cloud.
British Pound Fundamentals
The fundamentals behind GBP strength include upbeat inflation, employment, and consumer spending figures in the past weeks.
The Brexit Shenanigans...
Prime Minister May is facing increased pressure to get the Brexit ball rolling sooner rather than later, but it’s also worth remembering that she isn’t exactly a pushover either. Any confirmation that she is willing to move forward with the Brexit as early as April next year could put more weight on the pound as investors could turn their attention back to the potential gloom and doom that the UK economy could face.
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On the economic calendar, on Friday UK’s Gross Domestic Product for Q2 at 8:30 AM. The GDP is expected to remain at 2.2% and a better than expected result could help the GBP gain an edge against its forex counterparts.
I will be covering the US election and its potential impact on the markets this Thursday August 25th, so don’t forget to claim your free seat.
Meanwhile, the Jackson Hole Economic Symposium is kicking off Thursday where central bankers, finance ministers, academics, and financial market participants from around the world gather to talk finance. Potentially giving us some hints about their country’s economic outlook.
The meetings will continue on Friday and the U.S. central bank will be of key importance for investors, as its Chair Janet Yellen, is set to give a speech at 2 PM GMT, and investors will be looking to the Fed, to see if it provides any indications as to when it may raise interest rates, while giving a long-term outlook on the state of the U.S. economy.
GBPUSD Double Bottom formation could currently be on its way. There are two bullish scenarios at the moment:
1- Target the neckline for a short term trade
2- Wait for a confirmation and target the extended resistance levels for a long term trade.
Failure to break above the neckline will change our outlook back to bearish, with 1.2870 as first alternative target.
More on Economic Calendar
London Session: During the London session today we have the Industrial Production out of Switzerland at 7:15 AM GMT and German IFO - Business Climate (AUG) at 8 AM.
New York Session: During the New York session we have the US Durable Goods Orders (JUL P) at 12:30 PM which shows the value of orders placed for relatively long lasting goods, and the results could impact the USD strength. Next from the US is the Markit US Services PMI at 1:45 PM GMT.
Next day's Sydney session: During the next day’s Asian session Japan will release their National Consumer Price Index for July at 11:30 PM GMT which could potentially shake the Japanese Yen.
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London Session: During the London session German GfK Consumer Confidence Survey will be out at 6 AM GMT followed by UK’s Gross Domestic Product for Q2 at 8:30 AM.
New York Session: The US GDP will also be out today at 12:30 PM and the combination of high risk events could create a ton of volatility during the final trading day of the week.
Here are Invest Diva's calculations for important GBP/USD approximate levels to keep an eye on:
|Support Levels||Turning Point||Resistance Levels|