Short term
Trade view / 13 September 2016 at 2:21 GMT

GBPUSD has further recovery potential

Managing Director / Technical Research Limited
New Zealand

An indication of how the fall in sterling post-Brexit is flowing through into domestic prices is that the Bank of England has already brought forward its forecast date for achieving the 2% inflation target, and a good number today may get the market thinking a further revision will be hinted at in the minutes of the BOE meeting on Thursday. 

Wednesday’s labour market update, and retail sales the next day, could also be market-moving. Meanwhile, yesterday’s speech by FOMC voter Lael Brainard suggested she for one won’t be voting in favour of a rate hike next week, and the odds of majority on the committee voting to do so have dropped back under 20%.

Management and risk description

GBPUSD displays a five-week Inverse Head and Shoulders reversal pattern and yesterday completed a successful retest of Neckline support (refer daily chart below).  

Support today lies around the 1.3300 level, 1.3270 max, to yield a rally back towards last week’s 1.3445 high en route to Head and Shoulders target of 1.3730. Only a loss of 1.3240 (Neckline support) would frustrate this upside potential.


Entry: GBPUSD is seen as a buy today at 1.3300/1.3275.

Stop: 1.3236, initially.

Target: 1.3716.

Time horizon: Allow several days at least.

GBPUSD daily chart (click to expand)
GBPUSD  Daily Chart
Source: ThomsonReuters  

GBPUSD weekly chart (click to expand)
GBPUSD weekly chart
Source: ThomsonReuters.  Create your own charts with SaxoTrader; click here to learn more

— Edited by Susan McDonald

Non-independent investment research disclaimer applies. Read more
13 September
andywielkiszu andywielkiszu
really again?. could you give 1 TIME sth that works please!
13 September
andywielkiszu andywielkiszu
13 September
Max McKegg Max McKegg
trading is a process and losses are an inevitable part of the trading experience. Becoming annoyed and emotional over losses suggests that trading may not be for you.


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