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.

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
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar (via the DXY Index) has hit fresh lows amid the latest headlines around US fiscal stimulus talks. Get your market update from @CVecchioFX here:https://t.co/yDXdpZIcxq https://t.co/GlSrdNjEeZ
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Gold: 0.22% Oil - US Crude: 0.14% Silver: -0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/WR0TUUbAnB
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.12% 🇨🇭CHF: 0.09% 🇪🇺EUR: 0.08% 🇨🇦CAD: -0.02% 🇯🇵JPY: -0.03% 🇳🇿NZD: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/mgBg1eesms
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.68%, while traders in EUR/USD are at opposite extremes with 73.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ZyugXjE2ov
  • The British Pound is eyeing a push to fresh yearly highs against the US Dollar. However, various technical setups suggest GBP could lose ground to JPY, EUR and NZD in the near term. Get your $GBP market update from @DanielGMoss here:https://t.co/NSUnZnxAdi https://t.co/Ounuyh073c
  • The Dow Jones index appears to be ranging between 22,920 to 30,000 over the past few weeks. The overall trend remains bullish biased, but its upward momentum is fading as Bollinger Band width narrows. A decisive break above 30,000 resistance may open the door for further upside. https://t.co/pvWoVloiZV
  • Update on #Cryptocurrencies #BITCOIN -0.46% #BITCOINCASH -0.24% #ETHEREUM -0.78% #RIPPLE +0.83% #LITECOIN +0.77%
  • Wall Street Futures Update: Dow Jones (-0.110%) S&P 500 (-0.082%) Nasdaq 100 (+0.086%) [delayed] -BBG
  • 🇨🇳 Caixin Services PMI (NOV) Actual: 57.8 Previous: 56.8 https://www.dailyfx.com/economic-calendar#2020-12-03
  • BoJ's Suzuki: - Flexibility and sustainability in policy is vital - Supporting growth strategy in the long term is vital - Must support labor market - BBG $USDJPY
Short-term Selling Opportunity in GBP/USD to Start Last Week of May

Short-term Selling Opportunity in GBP/USD to Start Last Week of May

2013-05-27 13:30:00
Christopher Vecchio, CFA, Senior Strategist
Share:

The British Pound has been one of the worst performing currencies this year, losing -6.94% to the US Dollar through Friday’s close. (Only the Australian Dollar and the Japanese Yen are performing worse against the US Dollar, down by -7.15% and -14.37% through Friday, respectively.)

Over the past several weeks, the Sterling has been befallen by weak consumption data and signs of disinflation, provoking market participants into thinking that the Bank of England could revisit its QE program in August or September, after Mark Carney takes over the governorship from Mervyn King.

On the flip side, the US Dollar has been the benefactor of an increasingly hawkish tone from the Federal Reserve, best highlighted by Chairman Ben Bernanke’s testimony in front of a congressional committee last week, in which he indicated that if the US economy continues to improve, there is scope to slow the pace of QE3 incrementally.

Now, the US Dollar is taking on a hybrid role not only as a safe haven, but also as a growth currency, as US Treasury yields rise. With another batch of strong US data out due this week alongside neutral UK data, there is potential to see the GBPUSD slowly grind back towards its May lows, set last Wednesday, just above the psychologically significant $1.5000 level, at 1.5013.

A look at the 1 hour chart below suggests that a technical break in line with my view may already be beginning, denoted by the Bearish Rising Wedge. Accordingly, with a break and close below support this morning, there exists a favorable short GBPUSD setup that may evolve over the course of the next five to ten days.

GBPUSD 1-hour Chart: May 27, 2013

Short-term_Selling_Opportunity_in_GBPUSD_to_Start_Last_Week_of_May_body_x0000_i1027.png, Short-term Selling Opportunity in GBP/USD to Start Last Week of May

Charts Created using Marketscope – Prepared by Christopher Vecchio

STRATEGY – SHORT GBPUSD

Entry: At market (1.5110 at the time of writing)

Stop:1.5165 (above weekly high; above “Bernanke testimony” swing high) (-55-pips)

Target 1 (Reward/Risk Ratio): 1.5015 (76.4% Fibonacci retracement, March low to May high) (+95-pips, 1.73)

Target 2: 1.4835 (above yearly low) (+275-pips, 5.00)

Timeframe: 1- to 2-weeks

GBP EVENT RISK – May 26 to May 31

Short-term_Selling_Opportunity_in_GBPUSD_to_Start_Last_Week_of_May_body_Picture_1.png, Short-term Selling Opportunity in GBP/USD to Start Last Week of May

USD EVENT RISK – May 26 to May 31

Short-term_Selling_Opportunity_in_GBPUSD_to_Start_Last_Week_of_May_body_x0000_i1029.png, Short-term Selling Opportunity in GBP/USD to Start Last Week of May

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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

DISCLOSURES