News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCZ9dzS https://t.co/I8jJq8NGCH
  • We are heading into a Tuesday lull which precedes Wednesday's FOMC focus. Will the absence of distractions allow for risk trends to gain momentum or perhaps will Fed anticipation temper the $SPX tumble? My take: https://www.dailyfx.com/forex/video/daily_news_report/2021/09/21/Fed-Taper-Focus-May-Help-Stall-the-SP-500s-Collapse-Dollars-Charge.html https://t.co/T4m60xEfk6
  • CTV projects Trudeau wins his third term as Canada's Prime Minister - BBG
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/KY6MiOC9Y6
  • US House Speaker Pelosi says top-line spending number may change but hopes for $3.5 trillion in spending bill - BBG
  • RBA Minutes: - Board committed to providing high level of monetary support - Q3 GDP expected to decline materially - Central scenario is rates on hold until 2024 - BBG $AUDUSD
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-21
  • New Zealand reports 14 new local Covid cases - BBG
  • I had a chance to talk with @tastytradeRyan and @victorJ0NES about Evergrande and its impact on US markets — always great talking with these two guys on Mondays. https://t.co/vddTknnPWC
  • RT @cheddar: Stocks dropped the most since May on Monday, sending shockwaves through Wall Street. @CVecchioFX explains the global impact of…
UK Pound Forecast: Sterling Setups for the Week Ahead, GBP/USD, EUR/GBP

UK Pound Forecast: Sterling Setups for the Week Ahead, GBP/USD, EUR/GBP

Richard Snow, Analyst

Pound Sterling (GBP)Talking Points:

  • UK bank holiday likely to result in lower trading volumes on Monday
  • GBP Tech setups ahead of major risk events: GBP/USD, EUR/GBP
  • Major risk events: EU Core inflation then US consumer confidence, PMIs and NFP
Advertisement

Sluggish Sterling Start’s the Week on a Quiet Note

Bank holiday (UK) Monday saw a relatively muted start to the week for the Pound, as expected.

On the travel front, the UK has added 7 more countries to the ‘green list’ meaning that travellers coming from these countries back to the UK will not need to quarantine regardless of vaccination status. However, travel to and from other ‘amber’ or ‘red lists’ continue to elevate travel costs as Covid tests are required and in some cases expensive quarantine stays at government-approved hotels are mandatory.

GBP Key Technical Levels for the Week Ahead

A slower start to the week is not always a bad thing as it allows time to consider potential setups that could play out once London traders return to their desks.

The GBP/USD daily chart shows prices hovering at similar levels to Friday’s closing candle. The pair experienced short-lived volatility during Jerome Powell’s speech at the Jackson Hole Economic Symposium where he mentioned that bond and asset purchases could be reduced before the end of the year.

The pair looks set to continue trading sideways, at least in the early stages of the week, as GBP drivers remain subdued. As the week progresses, significant risk events will become clearer with the US data heavy week coming to a close on Friday with the NFP print.

Any continued bullish momentum off the back of Friday would need to clear the 1.3780 level of resistance before the 1.3920 zone of resistance comes into play. However, a pullback from Friday’s impulsive move would focus on the 1.3670 level with the 23.6% Fib level around 1.3580 the next potential level of support.

GBP/USD Daily Chart

GBP/USD daily chart

Chart prepared by Richard Snow, IG

Looking at the Euro vs the Pound we have witnessed higher price action after the bullish engulfing marked the recent lows in the pair. Since then, there appears to be a bullish pennant–like shape suggestive of a bullish continuation. In that case, be on the lookout for a break above the diverging trendlines towards the upside resistance of 0.8640 followed by 0.8720.

Read through our comprehensive Educational library for more information on the bullish engulfing candle pattern and others like it.

A failed break may lead to a continued period of sideways trading or possibly even another test of the low. Before that however, levels of support can be identified at 0.8540 before the resistance zone around the 0.8470 – 0.8500

EUR/GBP Daily Chart

EUR/GBP daily chart

Chart prepared by Richard Snow, IG

US Dominates Risk Events this Week

Non-US data: Eurozone sentiment (Monday), Eurozone CPI (Tuesday), Eurozone Unemployment (Wednesday)

US (High Impact) Risk Events:

Econ calendar

For all market-moving data releases and events see the DailyFX Economic Calendar

--- Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES