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Featured Chart Week of May 15: Golden Cross in GBPUSD

What’s Happening?

Last month GBPUSD broke out of a big head and shoulders bottom. This week, the 50-day average is moving back above the 200-day average a golden cross that confirms a new uptrend is underway in Cable. This comes in a week where the currency pair is challenging $1.3000 and a number of UK economic announcements are due.

Technicals:

In early April, GBPUSD broke out over $1.2700 completing a head and shoulders base that formed over a six month period following last summer’s massive Sterling selloff. This breakout signalled the start of a new uptrend.

Since then, the pair has continued to trend upward, recently consolidating gains in the $1.2840 to $1.3000 trading range. Higher lows in both the pair and the RSI, plus a golden cross of the 50-day average above the 200-day average indicate continued underlying through this pause.

A breakout over $1.3000 would signal the start of a new upleg with next potential resistance near $1.3155 a 38% Fibonacci retracement of the post-Brexit selloff.

 

Fundamentals:

It’s a big week for UK news. The election campaign continues with polls still giving the Conservatives a huge lead over Labour and other parties projecting toward a substantial majority government.

Economic news for the UK could attract significant attention from traders. Inflation, employment and retail sales data are due over the course of Tuesday through Thursday. At last week’s Bank of England meeting the MPC voted to stand pat as is normal during an election campaign. There was one hawkish dissenter, and this week’s data may indicate how much pressure Governor Carney could come under to start raising interest rates sometime after the June 8th vote.

CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

 

 

 


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.