Happy Friyay, guys! If you’re looking for a short-dollar setup, then might want to see this long-term uptrend on GBP/USD.
As you can see on the chart below, GBP/USD is currently having trouble breaking below the 1.2885 area. And why not?
The level is not only right at a 61.8% Fibonacci retracement, but it’s also being supported by the 100 SMA and this week’s bottom weekly ATR levels. More importantly, the area marks the support of a rising channel that hasn’t been broken since early February.
Buying Cable also makes sense these days especially when you consider that traders are tripping over themselves trying to sell the dollar.
See, aside from the latest FOMC meeting minutes not showing much love for another rate hike this year, doubts over Trump’s capacity to fulfill his campaign promises – you know, the ones that boosted the U.S. markets early this year – have also taken their toll on the markets.
Word around the hood is that Trump is planning to scrap his plans to establish an Advisory Council on Infrastructure. Yikes!
On the other side of the trade, the U.K. has been printing positive reports (for the headline numbers, that is) all week. The labour market continues to improve, retail sales are up, and inflation numbers juuust missed analysts’ expectations. On top of that, Mark Carney is being pressured to sound more hawkish.
For now, I’m thinking of putting on a small position at current prices or at the earliest signs of bullish momentum until I see if the bulls will extend Cable’s uptrend.
I’ll be keeping close tabs on the market themes, of course, and adjust my positions if needed.
What do you think of this setup?
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