GBP/USD Signals Update
Last Thursday’s signal was not triggered as although the price did hit 1.5033, the bullish price action did not form before London closed that day.
Today’s GBP/USD Signals
No signals are given today.
GBP/USD Analysis
Last Thursday I wrote that this remains a very difficult pair to trade, as its action was choppy and uncertain. This is still the case. The longer-term chart is deceptive as this pair looks like just another strong USD pair. However a closer look using short-term charts, as well as looking at the GBP’s strength relative to other currencies, shows that this pair is having trouble being led down by the USD. This is partly due to fundamentals, in that the Bank of England is seen as being likely to start to tighten monetary policy somewhere down the line, if not just yet. The other reason is that we are in a zone that has historically been strongly supportive of this pair, confluent with the key psychological level of 1.5000.
This pair has always been famous for its erratic and slippery moves through support and resistance levels, although it does tend to be driven very much by what happens early in the London session. However today all we can really see is uncertain movement. We appear to be located within a medium-term downwards channel, but the channel is not very symmetrical and therefore could well be meaningless.
It is best to stay on the side line for the time being.
There are high-impact data releases scheduled today concerning both the USD the GBP. At 9:30am London time there will be a release of U.K. Construction PMI data, which may affect the GBP. Later at 3pm, there will be a release of U.S. ISM Manufacturing PMI data.