Several economic reports released last week gave us reason to believe that the U.S. economic situation is getting better. Key among them was the solid gain in core retail sales and the unexpected decline in initial jobless claims.
Core retail sales jumped 0.5% versus the 0.4% forecast while initial jobless claims fell to levels not seen since the latter part of 2007. Needless to say, the forex market saw these as signs that the Fed would indeed taper in September.
Looking ahead, I think economic data, especially those related to employment like the initial jobless claims, will continue to be the ones to drive price action. The FOMC meeting minutes should also be an important report to watch out for as it could shed light on the internal discussions of the policymakers.
It’s going to be hard to forecast price action this week, but I do have some setups on mind… Check two of them out below!
Based on how GBP/USD has been moving, I remain bullish on GBP/USD. It has been trading above both the 100 and 200 SMAs and I’ve yet to find a proper entry. I’m going to be patient on this one and wait for a solid pullback.
With the SMAs moving horizontally, I don’t have a clear directional bias on the pair. It’s ranging and I’m thinking of jumping in short at the top of the channel or long at the bottom. Let’s see where price goes this week!