Cable has massively outperformed in recent days due to a range of different factors. Probably the most important of these has been less dovish expectations for the Bank of England this year after various members of the Monetary Policy Committee highlighted risks of higher inflation due to relatively strong earning and job data. Sentiment also received a boost from rumours that the UK might be able to strike a trade deal with the USA and avoid tariffs entirely.
Such a textbook three soldiers pattern on the daily chart of a major forex pair is extremely rare and probably shouldn’t be considered a reliable buy signal in itself given the recent strong fundamental drivers. Although buying volume has increased this week, the price is very strongly overbought. $1.30 as a round number is a clear potential resistance while it might be possible to see the 50% monthly Fibonacci retracement around $1.27 flipping to a zone of support.
A positive NFP might drive a significant retracement in the immediate aftermath. However, this could provide an opportunity for new buyers depending on any further news of trade wars. Next week’s inflation from the USA is also key for sentiment on the dollar generally and specifically when the Fed might cut next.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
Such a textbook three soldiers pattern on the daily chart of a major forex pair is extremely rare and probably shouldn’t be considered a reliable buy signal in itself given the recent strong fundamental drivers. Although buying volume has increased this week, the price is very strongly overbought. $1.30 as a round number is a clear potential resistance while it might be possible to see the 50% monthly Fibonacci retracement around $1.27 flipping to a zone of support.
A positive NFP might drive a significant retracement in the immediate aftermath. However, this could provide an opportunity for new buyers depending on any further news of trade wars. Next week’s inflation from the USA is also key for sentiment on the dollar generally and specifically when the Fed might cut next.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.