Short term
/
Buy
Trade view / 18 March 2018 at 22:39 GMT

GBPUSD shows potential for a short-term recovery

Managing Director / Technical Research Limited
New Zealand
Instrument: GBPUSD
Price target: 1.4138
Market price: 1.3945
Background

This is a big week for economic data out of the UK, beginning with an inflation update on Tuesday, then retail sales and the Bank of England monetary policy statement on Thursday. Even though data released since the last Bank meeting has been mixed, the statement will probably be little changed and therefore reinforce the likelihood of a May rate hike.

But for GBPUSD, a bigger impact may be felt the day before when the Federal Open Market Committee statement is released. While a rate hike is priced in, the Committee could surprise markets if its median forecast shows a total of four rate hikes over 2018 as opposed to three previously.

Management and risk description

In the short term, Sterling has completed a requisite Elliott Wave corrective structure from last week’s 1.3995 high. While holding support at 1.3915/1.3890, we are looking for rally above 1.3995 resistance to herald a recovery towards 1.4070 and 1.4145 over the coming days.

Parameters

Entry: Today Only: Sterling is seen as a Buy on reaction to around 1.3920 (provided it doesn’t rally toward 1.3995 first).

Stop: just under 1.3890, initially.

Target: 50% at 1.4063 and 50% at 1.4138.

Time horizon: allow several days.

Daily GBPUSD chart (click to expand)GBPUSD daily chart


















Source: ThomsonReuters. Create your own charts with SaxoTrader; click here to learn more.


Weekly GBPUSD chart (click to expand)



















Source: ThomsonReuters  

For more on forex, click here.

— Edited by Robert Ryan

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2y
THINK THINK
Excellent view!
2y
Morten Olby Morten Olby
Very good call Max! Turned exactly in 1,3920 and rallied to 1,4035!!
2y
Alan M Alan M
Wow max, your a genius. Missed this one personally, but still, what a call!
2y
iruman3 iruman3
sir I am grateful to you.thanks for being helpful.....
2y
leotdipl leotdipl
Max, thank you for the analysis. Can you ask for waves? I learn a lot thanks to these waves)

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