I played with their* hearts. And probably winning this game.
My GBP/USD forecast seems to be on track as we predicted a pullback towards the 50% Fibonacci (made pips on the down moves) and then predicted a rebound (currently making pips on the up moves.)
Oops!…You think I’m in love
That I’m sent from above
I’m not that innocent
*British Pound Bears
Please forgive my high Britney Spears style spirit. It’s Friday and I’m making money so… Here are two reasons why Mr. British Pound could keep dancing up on the forex dance floor:
1- The Scottish remain British
Today the British government can breathe a sigh of relief as the Scottish people have spoken, 55.4% No versus 44.6% Yes. An army of silent No voters emerged defeating the unprecedented challenge to the 307-year union.
It is a bitter sweet day for the resident of the unchanged United Kingdom. Scotland’s capital voted No however Scotland’s largest city Glasgow voted Yes.
This being said devolution and devolvement of power begins and things will never be the same again as the posturing has already begun. Westminster has already backed itself against a wall and offered promises to Scotland that it perhaps cannot keep, certainly not if it wants to keep the British population on-side. Nonetheless, Mr. British Pound headed for its biggest two day jump in seven months, stronger against all 16 major currencies.
2- Positive UK jobs data for August
Impressive U.K. jobs report for August showed a much larger than expected 37.2K drop in unemployment, enough to bring the jobless rate down from 6.4% to 6.2% during the month. To top it off, the July report was revised to show a 37.4K decline in joblessness from the previously reported 33.6K drop.
The Challenge
As far as GBP/USD is concerned, it is a a dancing challenge between Mr. British Pound and Ms. USA though. Although Pound seems to be flying high, the US dollar is getting her own pieces of up moves.
US jobless data was a better affair posting modest gains at 280k versus predictions of 305K with the number of Americans filing for unemployment benefits falling more than expected, the lowest level since July. The Dollar hit more than a six year high against the Yen following from this news, with equities trending higher and the S&P500 brushing near its peak record levels.
It takes two to tango especially when it comes to currency pairs and a strong pound and a strong dollar combo can make things a bit tricky.
It could be a good idea to trade the British Pound versus and obvious weakening currency like the Japanese Yen or the Euro to have better pip making opportunities.
Intraday Forex Technical Levels
EUR/USD 4-hour: Rebounding from the Ichimoku’s cloud.
Invest Diva Likes: Short positions below 1.2836 with targets at 1.2810 and 1.2771 in extension.
If Pair Goes Nuts: Above 1.2836 look for further upside towards 1.2874 and 1.2917.
What’s up on the Forex Dance Floor: The pair is on an overall downtrend and now teasing the support level at 1.2874 after rebounding from the lower boundary of Ichimoku’s cloud and the middle of Bollinger Band with the RSI below the neutrality area. We can wait and see if the pair would break the resistance level at 1.2836.
Supports and Resistances
1.2917
1.2874
1.2836 Pivot Point
1.2810
1.2771
USD/JPY 4-hour: Consolidating.
Invest Diva Likes: Short-term short positions below 108.71 with targets at 108 and 107.36 in extension.
If Pair Goes Nuts: Above 109.17 look for further upside towards 110 and 110.52..
What’s up on the Forex Dance Floor: The pair is on an overall uptrend above the Ichimoku’s cloud but is now consolidating between the level at 109.17 and 108.71. The RSI is heading below the overbought zone.
Supports and Resistances
110.52
110
109.17
108.71 Pivot point
108
107.36
AUD/USD 4-hour: Consolidating.
Invest Diva Likes: Short positions below 0.8937 with targets at 0.8895 and 0.8830 in extension.
If Pair Goes Nuts: Above 0.8981 look for further upside towards 0.9037 and 0.9076.
What’s up on the Forex Dance Floor: The pair is on an overall downtrend below the Ichimoku’s cloud but is now consolidating between the levels at 0.8981 and 0.8937. The RSI is heading above the oversold zone. Also one of the largest international brokers says that 69% of traders are long the pair. Using this market sentiment index as a contrarian signal, the combination of the technicals and current sentiment gives a further bearish bias.
Supports and Resistances
0.9076
0.9037
0.8981
0.8937 Pivot point
0.8865
0.8830
