GBP/USD right at major resistance, remain bearish
Sell below 1.2531. Stop loss at 1.2621. Take profit at 1.2378.
Reason for the trading strategy (technically):
Price is testing major resistance at 1.2531 (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance, descending resistance) and we expect to see a reaction from this level for a further drop to at least 1.2378 support (Fibonacci retracement, horizontal swing low support).
Stochastic (34,5,3) is seeing strong resistance below the 94% level where we hope to see a reaction from when Stochastic reaches that level.
Reason for the trading strategy (fundamentally):
The main news event driving USD today is the U.S. ISM Manufacturing survey. It is one of the biggest market moving economic releases because of its Prices Paid and Employment subcomponents which reflect sentiment towards inflation and labor conditions - two of the market's most significant health indicators. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. We’re expecting forecasts of a decrease which means a bearish USD is expected, this goes against our bearish GBPUSD view, hence it is best to exercise caution on this trade.
Reason for the trading strategy (technically):
Price is testing major resistance at 1.2531 (Fibonacci retracement, Fibonacci extension, horizontal overlap resistance, descending resistance) and we expect to see a reaction from this level for a further drop to at least 1.2378 support (Fibonacci retracement, horizontal swing low support).
Stochastic (34,5,3) is seeing strong resistance below the 94% level where we hope to see a reaction from when Stochastic reaches that level.
Reason for the trading strategy (fundamentally):
The main news event driving USD today is the U.S. ISM Manufacturing survey. It is one of the biggest market moving economic releases because of its Prices Paid and Employment subcomponents which reflect sentiment towards inflation and labor conditions - two of the market's most significant health indicators. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. We’re expecting forecasts of a decrease which means a bearish USD is expected, this goes against our bearish GBPUSD view, hence it is best to exercise caution on this trade.