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Sterling Weekly Technical Outlook: GBPUSD, EURGBP and GBPJPY

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Sterling (GBP) Technical Analysis

  • GBPUSD descending wedge formation continues.
  • EURGBP starting to look toppy.
  • GBPJPY breaks trend but move may be overdone in the short-term.

Q2 Trading Forecasts for a wide range of Currencies and Commodities including GBP with our fundamental and technical medium-term technical outlook.

How to Combine Fundamental and Technical Analysis.

Technical Forecast for Sterling (GBP): Neutral

GBPUSD continues to trade above 1.3000, a temporary Soft Brexit ‘line in the sand’, but other forces are now in play which could see this level tested again. A downward wedge from the March 13 high at 1.3382 is seemingly in control of price action with the floor around the March 11 low at 1.2960. Trading ranges of late have been tight with traders seemingly growing tired of the ongoing Brexit saga and looking elsewhere for opportunities. A break below 1.3000 would see the floor of the wedge under pressure as well as the important 200-day moving average which has provided support since February 19. If broken, the 23.6% Fibonacci retracement level at 1.2894 comes into play. A clear break and close above the downtrend would see the 38.2% Fib retracement at 1.3177 as the first target.

GBPUSD Daily Price Chart (May 2018 – April 12, 2019)

GBPUSD

How Central Banks Impact the Forex Market

EURGBP continues to grind higher off the April 3 low and has added the best part of 1.5 cents with just one down day. The 0.8649 recent high has been touched today and a close above here would leave important resistance at 0.8718 (38.2% Fib) and the March 21 spike at 0.8723 as valid targets. Above here, two further Fibonacci retracement areas and the 200-day moving average would cap momentum. The CCI indicator at the bottom of the chart suggests the market is becoming overbought and this may temper further upside in the short-term. To the downside there is congestion all the way back down to the recent low at 0.8472, a low previously seen nearly two years ago.

EURGBP Daily Price Chart (July 2018 – April 12, 2019)

EURGBP

Interest Rates and the Foreign Exchange Market

GBPJPY has made a notable upside move today, breaking out of a restrictive wedge and above the 20- and 50-day moving averages. The pair have been supported by the 200-day ma since mid-February and a close above tend could see GBPJPY push higher. The move may be slowed by the overbought signal from the CCI indicator. Support should start around 144.58 off the 200-day moving average before the recent low and wedge bottom at 143.65. Further bullish sentiment could see the recent 148.88 high under threat.

Looking for a fundamental perspective on the GBP? Check out the Weekly GBP Fundamental Forecast.

GBPJPY Daily Price Chart (June 2018 – April 12, 2019)

GBPJPY

DailyFX has a vast amount of resources to help traders make more informed decisions. These include a fully updated Economic Calendar, and a raft of constantly updated Educational and Trading Guides

— Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

Other Weekly Technical Forecast:

Australian Forecast– AUDUSD Flirts with 200 Day Moving Average, AUDJPY Earns Strong Break

Crude Oil Forecast – Will Pres. Trump Tweet at $65?



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Weekly Trade Levels for US Dollar, Euro, Sterling, Loonie, Gold & Oil

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New to Forex Trading? Get started with this Free Beginners Guide

DXY, Euro, Loonie Monthly Opening-Ranges Intact

The US Dollar Index is trading into the monthly opening-range highs into the start of the week and the focus is a reaction around the 98.05/10 resistance zone- note that the monthly ranges in Euro and Loonie also remain intact. In this webinar we review updated technical setups on DXY, EUR/USD, USD/CAD, GBP/USD, Crude Oil (WTI), Gold, USD/JPY, AUD/USD, EUR/AUD & SPX.

Why does the average trader lose? Avoid these Mistakes in your trading

Key Trade Levels in Focus

DXY – Immediate focus is on topside resistance at 98.05/10. Initial support at 97.87 with near-term bullish invalidation raised to 97.71.

EUR/USD – Euro is coiling into the monthly opening-range just above slope support. Immediate focus is on support at 1.1140. Initial resistance at 1.1187 with near-term bearish invalidation at monthly-open resistance at 1.1215– look for a bigger reaction there IF reached. A break lower would expose 1.1110.

GBP/USD – Sterling broke below multi-month slope support last week with price responding to near-term pitchfork support into the open. Initial resistance at 1.2798 with bearish invalidation at 1.2859. Downside support objectives at the August low-day close at 1.2697 and the 100% extension at 1.2662.

Gold – Risk for near-term recovery while above the yearly / monthly low-day close at 1270. Initial resistance at 1280 with near-term bearish invalidation with the monthly open a 1283.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Key Event Risk This Week

Economic Calendar- Key Data Realeses

Economic Calendar – latest economic developments and upcoming event risk

Active Trade Setups:

Learn how to Trade with Confidence in our Free Trading Guide

—Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex



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AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop

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MARKET DEVELOPMENT – AUD Soars on Shock Election, Apple Shares Slump, Risk to S&P 500

DailyFX Q2 2019 FX Trading Forecasts

AUD: The Aussie outperforms following a shock election outcome, in which Prime Minister Scott Morrison secured re-election (full story). In reaction, the Aussie gapped higher at the Asia open, reclaiming the 0.69 handle against the greenback. However, as equity markets have headed lower throughout the European morning, risks are for gains to be faded. Alongside this, key headwinds in the form of trade war tensions and a potential RBA June rate cut are likely to limit upside. Reminder, RBA Governor Lowe due to speak tonight after RBA meeting minutes (calendar)

Crude Oil: Oil prices surged at the Asia open as Saudi Arabia signalled that cuts could be extended throughout the remainder of 2019 at the JMMC meeting, while President Trump had also stepped up his critical rhetoric towards Iran. Although, with equity prices beginning to push lower, oil prices have pared the majority of its initial gains.

Equities: US equity futures have headed lower amid the continued crackdown by the US on China’s Huawei, which in turn has chipmakers come under pressure, while Google also stated that they are to restrict the company’s use on android services. Elsewhere, Apple’s price target had been cut by HSBC to $174 (median street price target = $220), citing concerns over China, while tariff led price increases on Apple products could also have dire consequences on demand. Apple shares currently lower by 2.4% in pre-market.

AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop - US Market Open

Source: DailyFX, Thomson Reuters

DailyFX Economic Calendar: – North American Releases

AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop - US Market Open

IG Client Sentiment

AUDUSD Soars on Shock Election, Apple Shares Slump, Risk of S&P 500 Drop - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low” by Nick Cawley, Market Analyst
  2. COT Report: Japanese Yen and Euro Shorts Collapse, USD Longs Reduced” by Justin McQueen, Market Analyst
  3. Crude Oil Price May Be Carving Out a Top” by Paul Robinson, Currency Strategist
  4. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX



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Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low

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Gold (XAU) and Silver (XAG) Price Analysis and Charts.

  • Gold (XAU) eyes a cluster of support.
  • Silver (XAG) makes afresh 2019 low as buyers disappear.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

Gold (XAU) Needs to Support to Hold

The sell-off on gold continues with the precious metal down around $30 in less than a week. Gold is under pressure from a resurgent US dollar, buoyed by last Friday’s Uni of Michigan data which smashed expectations and hit a multi-year high. The important 61.8% Fibonacci retracement level at $1,287/oz. failed to provide any support when broken last week, while the $1,287 – $1,281/oz. zone made up of old horizontal support is being tested now. A clear break and close below opens the way to the recent double bottom around $1,266/oz. which is currently being guarded by the 200-day moving average at $1,268.6/oz. Below here the 50% Fibonacci retracement level at $1,262/oz heaves into view.

How to Trade Gold: Top Gold Trading Strategies and Tips

Gold (XAU) Daily Price Chart (August 2018 – May 20, 2019)

Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low

Silver (XAG) Nears a Fresh Six-Month Low

Another precious metal under heavy selling pressure. Silver is now at levels last seen in early December last year and is over 11% lower since making its recent high of $16.21/oz. in late February. The downtrend since the late-February high continues to be respected and it is possible that silver completely retraces all the way back down to the November 14 low at $13.89/oz. Psychological support at $14.00/oz. may slow the decline, while the CCI indicator shows that the market is extremely oversold.

Silver (XAG) Daily Price Chart (August 2018 – May 20, 2019)

Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low

Trading the Gold-Silver Ratio: Strategies and Tips.

IG Client Sentiment data show that retail traders are 79.1% net-long gold, a bearish contrarian indicator. Recent daily and weekly sentiment shifts give us a stronger bearish contrarian bias.

— Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1



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