GBP/USD: Is Bullish Bias Set To Persist?
MaiMarFX | Mar 08, 2016 07:10AM ET
Both major currency pairs experienced a volatile start to the new week and there was something for everyone. While bears initially set the tone, providing short-traders a good profit, bulls won out against the bears at the end of the day, sending the euro and British pound higher against the U.S. dollar.
Consequently, the current sentiment appears to be strongly bullish. But what's next? Let's have a look at the technical side.
GBP/USD
Sterling still trades within a tertiary downward channel. After the recent rise the situation appears somewhat overbought, so traders should generally expect increased bearish momentum in the near-term. If the pair is able to break significantly above 1.43, we see next resistances at 1.4360 and 1.44. Even if concerns about a potential Brexit have eased somewhat, the latest U.K. economic reports were not really encouraging. We therefore favor a bearish stance and focus on next resistances from where GBP may bounce back.
Bank of England Governor Mark Carney is scheduled to testify at Parliament's Treasury Committee on the economic and financial benefits of EU membership today at 9:15 a.m. GMT. Carney has declined to reveal any details of the possible actions the BoE will be considering in the event of Brexit. A potential EU withdrawal fueled speculation the U.K. could fall into recession and the central bank would have to respond with a rate-cut. Traders should keep an eye on Carney's testimony as any new insights or details could have a significant impact on the pound.
The Eurozone GDP is scheduled for release at 10:00 GMT, but no changes are expected.
Here are our daily signal alerts:
EUR/USD
Long at 1.1030 SL 25 TP 35
Short at 1.0984 SL 25 TP 20, 40
GBP/USD
Long at 1.4272 SL 25 TP 30-35
Short at 1.4214 SL 25 TP 20, 40
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.