GBP/USD Levels to Know Ahead of UK CPI, FOMC & BoE
Chart prepared by Michael Boutros
Technical Outlook: Cable has continue to trade within in the confines of a descending median-line formation extending off the May highs with the pair rebounding off confluence support today at 1.4120 where the 50-line (red) converges on April low-day close. Sterling will remain at the mercy of upcoming Brexit polls as we get close to the June 23rd UK referendum. That said, the broader outlook remains weighted to the short-side while within this formation with interim resistance seen at 1.4347 backed by the 1.44-handle. Bearish invalidation stands at 1.4480- a level defined by the June open, the upper median-line parallel and former parallel support extending off the April low.
A break below the 76.4% retracement at 1.4060 would be needed to validate the next leg lower targeting the 1.40-figure and the 2016 low-day close at 1.3910. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
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- A summary of the DailyFX Speculative Sentiment Index (SSI)shows traders are net long GBPUSD- the ratio stands at +1.64(62% of traders are long)-bearishreading
- Yesterday the ratio was +1.58; Long positions are 6.6% lower than yesterday and 2.1% above levels seen last week
- Traders have remained net long since May 31st – (GBPUSD recently topped on 5/26)
- Open interest is 7.8% lower than yesterday and 17.6% below its monthly average
- The SSI profile suggests cable remains at risk for further declines heading into tomorrow’s release- That said, it’s important to note that the recent pullback in open interest indicates that market participation continues to wane ahead of major UK event risk over the next two weeks.
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Relevant Data Releases This Week
Other Setups in Play:
- Webinar: FOMC Setups - Markets Primed for Yellen
- USD/CAD Contained by Clear Price Levels Ahead of Canadian Employment
- NZD/USD: RBNZ Breakout Approaching Initial Resistance Targets
- USD/CAD In Free-Fall; Critical Support 1.2540
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---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.