Good Morning! Hope everyone had a great weekend! Tonight we will take a look at GBP/USD. Yesterday we saw the US New Home Sales numbers came out weaker than expected at 0.85M versus the forecast of 0.99M. This further enforces the bearish sentiment on the Greenback, and if the US Consumer Confidence number comes out weak as expected by the market tomorrow, we should see GBP/USD rally even further.
We're currently looking at a minor pull back from today's rise in GBP/USD, and we may see further volatility during the morning Euro session with BBA Mortgage Approvals and Business Investment data out of the UK at 4:30 am EST. Also, Bank of England Governor King will deliver the February 2007 Inflation Report to the Treasury Committee in London at 5:45 am EST. Any hints of rising inflation should further speculation of another rate hike.
I do favor a long trade in GBP/USD, but I will have a short trade as well in case of any surprises in today's data.
Long GBP/USD at 1.9600, stop at 1.9560, pt1 at 1.9650, pt2 at 1.9700
Short GBP/USD at 1.9740, stop at 1.9780, pt1 at 1.9710, pt2 at 1.9670
Please remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.
Good luck and good trading!
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