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Analysis of RBA, BOJ, FOMC, SNB, BOE and the week aheadWeek of the 18th March (H4) DXY: Stay below 50% (103.70) to maintain bearish view, could trade down to 102.40 support NZDUSD: Buy 0.61 SL 30 TP 100 AUDUSD: Buy 0.6580 SL 40 TP 80 (Tuesday: RBA Decision) USDJPY: Riskier: Sell 148.50 SL 80 TP 200 (Tuesday: BOJ Policy Decision) GBPUSD: Buy 1.2760 SL 50 TP 100 (Thursday:BOE Voting) EURUSD: Sell 1.0860 SL 30 TP 60 (If DXY strengthens) USDCHF: Sell 0.8860 SL 35 TP 105 (Thursday: SNB decision) USDCAD: Buy 1.3455 SL 30 TP 13 (Tuesday: CPI data) Gold: Bounce off 2150 to retest high of 2200
TVC:DXYShort
by JinDao_Tai
GBP/USD edges lower, UK employment nextThe British pound has started the trading week in negative territory. In the North American session, GBP/USD is trading at 1.2807, down 0.39%. The pound has posted six straight winning days and climbed 1.56% last week against the US dollar. The UK releases the employment report on Tuesday. The labor market has remained resilient even with the steep rise in interest rates, and the new measure for employment data has indicated that the labour market is stronger than previously thought. For instance, the unemployment rate in the fourth quarter of 2023 stood at 3.8%, compared to 4.2% under the old measure. The unemployment rate is expected to remain steady at 3.8% in the first quarter. We could see a large drop in job growth, with an estimate of 10,000 for Q4, compared to 72,000 in Q3. Wage growth has been dropping steadily and is expected to tick lower to 5.7% y/y including bonuses, down from 5.8% in the third quarter. The Bank of England will be keeping a close eye on the employment release. The BoE meets on March 21 and Governor Bailey has eased up on his pushback against rate cut expectations. If Tuesday’s employment numbers are stronger than expected, it will likely raise the odds of a rate cut later this year. In the US, Friday’s employment release was a mix. Job growth remained strong as nonfarm payrolls rose 275,000, easily beating the market estimate of 200,000 and the downwardly revised 229,000 in January. However, the unemployment rate surprised by climbing to 3.9% after holding at 3.7% for three consecutive months, which was also the market estimate. This was the highest unemployment rate in two years and points to softer labor market conditions. The rise in the unemployment rate has raised the odds of a rate cut in June by the Federal Reserve. Currently, the likelihood of a cut is 71%, compared to 64% just one week ago, according to the CME’s FedWatch tool. There is resistance at 1.2902 and 1.2945 GBP/USD pushed below support at 1.2852 and is testing support at 1.2809
by OANDA
GBPUSD: Expecting a drop from hereEven though sterling has found recent resilience, we are in a long-term down trend. I believe the recent rally must end, fundamentally the pound is much weaker than the dollar, the UK is in recession and the US looks likely to avoid one. The FED will start cutting rates, but I believe the BoE will act sooner (or at the same time) because it doesn't have the grace of a strong economy. On the LTF's we're at the top of this current dynamic rising range, but I think we may see a break of the lower boundary, and if we do this will be the resumption of the downtrend.
Short
by Finchcliffe
GBPUSD 25/2/24GU following on from our last hourly and higher timeframe post, we have moved like clockwork as we have expected, running back to our higher zones and forming clear liquid under our retracement lows. Now as we stand from last week we are in a bearish swing range as we took the SWL highlighted in our chart here! Looking for a pullback within our five min range and then a shift down into our lows to lower prices where we look for buyers stepping into the game. if we do go higher first il look for a sell off from our supply or a sweep of our SWH leaving us with an A model for sells!
by PipSurfingSociety
GBP/USD climbs after Bailey’s dovish commentsThe British pound is higher on Tuesday. In the North American session, GBP/USD is trading at 1.2650, up 0.43%. With little else on the calendar today, Bank of England Governor Andrew Bailey is front and center. Bailey testified earlier before Parliament’s Treasury Committee and was surprisingly open about possible rate cuts later this year. Bailey did not push back against market expectations and said that the BoE could cut rates even if inflation remained about the 2% target. Up to this point, Bailey has pushed back against market expectations of a rate cut and today’s comments could signal a major pivot in the Bank’s rate policy. Bailey said that the market curve, which is projecting rate cuts, was “not unreasonable”. The BoE has kept rates unchanged since August and there is pressure on the central bank to provide some relief to households and businesses and lower rates. Bailey’s dovish comments to lawmakers could be an attempt to put a positive spin on the weak UK economy, especially after last week's GDP report indicated that the UK economy tipped into a recession in the second half of 2023. Bailey told lawmakers that the data indicated that this was a “very weak recession” and that here were “distinct signs of an upturn”. Still, Bailey’s acknowledgment that rate cuts may be coming is a significant pivot and market pricing on interest rate cuts was brought forward after Bailey’s testimony. Currently, the markets are predicting a first rate cut in August, with two more cuts before the end of the year. GBP/USD tested resistance at 1.2607 earlier. Above, there is resistance at 1.2679 1.2607 and 1.2530 are providing support
by OANDA
GBPJPY 18/02/24GJ giving some nice areas for potential moves, mainly i can see we are using the short term lows as a clear area to build up liquid for a deeper retracement, if this move does take place it will shift us back into a bearish swing range as the 5min price action is currently sitting within a bullish range, this range isn't the strongest but is still valid in terms of a short term bias within price. If we do shift bearish il be looking towards the major demand sitting at our last internal low in price, this of course will also act as liq so running this a possibility. always keep in mind higher timeframe bias is only validated with lower timeframe confirms and trade entries, so be sure to always trade with order flow.
by PipSurfingSociety
GBPUSD: Analysis Pre BOE Rate decision. Today's focus: GBPUSD Pattern – Consolidation Watch Support – 1.2665, 1.2610 Resistance – 1.2751 Hi, and thanks for checking out today's video update. We are looking at the GBPUSD today as the price continues to consolidate in a rough ending diagonal pattern. We have also chosen the cable as we have the UK rates decision to come out later today. Depending on what we see from the BOE, this could be a catalyst to break the price out of its current deadlock. Yes, we do have a consolidation in an uptrend but its not a traditional continuation pattern so we are waiting to see if, and where price breaks ou before we start thinking about directional calls. Rates are expected to remain on hold, so we will be looking for policy clues in the statement. Will we see a breakout today? We have run over scenarios for price and points we will look at for potential confirmation. UK Interest Rate decision is due today at 11:00 pm. Good trading.
by Eightcap
1
GBP/USD dips as retail sales slideThe British pound has weakened slightly on Friday. In the European session, GBP/USD is trading at 1.2682, down 0.18%. The markets were expecting a letdown from December retail sales after a strong November reading, but nobody was expecting a multi-year drop. Yet that's what happened, as retail sales plunged 3.2% m/m, the lowest level since January 2021. Considering the sharp drop, the British pound's reaction has been muted. In November, retail sales jumped a revised 1.4%, as shoppers flocked to department stores to take advantage of Black Friday sales and other discounts. This meant that much of the Christmas shopping took place in November. The massive drop of 3.2% crushed the consensus estimate of -0.5%. There is more to this story than Black Friday sales. The weak December reading reflected a UK consumer who is pessimistic about the economy and is being relentlessly squeezed by high inflation and elevated borrowing costs. December retail sales were brutal but the struggles faced by consumers are nothing new - retail sales fell by 2.8% in 2023, the lowest level since 2018. The sharp drop in retail sales will have a negative impact on December GDP, which could mean that GDP for the fourth quarter is negative. If that is the case, the UK will technically be in a recession, with two consecutive quarters of negative growth. Even if the UK manages to avoid a recession, growth will be flat. The Bank of England has kept rates unchanged for three straight times and meets on February 1. The sharp drop in retail sales supports the BoE considering a rate cut, but December inflation rose unexpectedly from 3.9% to 4.0%, and the BoE will be hesitant to chop rates before inflation is closer to the 2% target. GBP/USD is testing support at 1.2689. Next, there is support at 1.2625 There is resistance at 1.2738 and 1.2802
by OANDA
GBP/USD eyes UK retail salesThe British pound has edged lower on Thursday. In the European session, GBP/USD is trading at 1.2655, down 0.20%. What goes up must come down. That has the markets fretting ahead of the UK retail sales report on Friday. Retail sales growth was brisk in November, with an impressive gain of 1.3% m/m. This followed zero growth in October and marked the strongest gain since April 2022. The problem with the strong November release was that consumers were enticed to spend big due to Black Friday sales in late November. This is expected to dampen December retail sales, with many shoppers taking advantage of the discounted prices and attending to their Christmas shopping a few weeks early. The market estimate for December retail sales stands at -0.5%. The Bank of England will be keeping a close look at the retail sales report, as it digests this week's inflation data with an eye to the next policy meeting on February 1. Inflation in December rose unexpectedly, climbing from 3.9% to 4.0%. The BoE has tried to dampen market expectations of up to six rate cuts this year, with Governor Bailey sticking to a script of "higher for longer". The BoE won't be entertaining rate cuts until it is convinced that inflation is closer to the 2% target and key economic releases point to an improving economy. The unexpected rise in inflation did not support talk of a rate cut, and all eyes are now on Friday's retail sales report. GBP/USD tested support at 1.2656 earlier. Next, there is support at 1.2616 There is resistance at 1.2715 and 1.2755
by OANDA
GBP/USD eyes UK wage growthThe British pound has started the week with slight losses. In the European session, GBP/USD is trading at 1.2725, down 0.21%. The UK will release employment data on Tuesday and the spotlight will be on wage growth. Over the past few months, wages have been falling and the Bank of England would like to see that trend continue as wages have been driving inflation. Average earnings including bonuses dropped to 7.2% in the three months to September, down from 7.7% in the previous release. The market estimate stands at 6.8% for the three months to October. The UK economy is in trouble, although there was some good news on Friday, as November GDP rebounded with a gain of 0.3% m/m after a 0.3% decline in October. Retail sales drove the gain as shoppers took advantage of Black Friday sales late in November. Still, the probability of a recession, which is defined as two consecutive quarters of negative growth, remains high. The economy declined by 0.1% in the third quarter and a fourth quarter of negative growth would mean that the economy is technically in a recession. Even if a recession is avoided, the economy has flatlined and isn't showing any growth. The lack of economic growth puts the Bank of England in a dilemma. The central bank has sharply raised interest rates in order to curb high inflation and significant progress has been made. A year ago, inflation was in double digits, galloping at a 10.1% clip. Inflation has fallen to 3.9%, which is still double the 2% target. Governor Bailey has pushed back against rate cuts and insisted that the BoE would maintain a 'higher for lower' rate path, but lowering rates would increase economic activity and lessen the likelihood of a recession. The BoE has maintained the cash rate at 5.25% three straight times and meets next on February 1. GBP/USD is testing support at 1.2721. Below, there is support at 1.2687 There is resistance at 1.2753 and 1.2787
by OANDA
GBP/USD yawns after strong UK GDPThe British pound is showing limited movement on Friday. In the European session, GBP/USD is trading at 1.2769, up 0.05%. The British economy grew in November by 0.3% m/m, rebounding from a 0.3% decline in October and edging above the market estimate of 0.2%. This was the sharpest GDP growth since July and was driven by stronger activity in services, retail sales and manufacturing. The news was not as good from a three-month snapshot, however. The economy contracted 0.2% in the three months to November, unchanged from the previous release and missing the market estimate of -0.1%. The December GDP release will answer the question of whether the UK economy is in a shallow recession. Third quarter GDP was revised to -0.1% and if Q4 also posts negative growth, the economy would technically be in a recession. Even if the economy manages to avoid a recession, it will likely point to stagnation. The weak UK economy presents the Bank of England with a dilemma. The BoE is under pressure to lower rates to kick-start the economy, but inflation is running at a 3.9% which is almost double the 2% target. The BoE would prefer to maintain a 'higher for longer" rate path and let restrictive rates continue to push inflation lower. The central bank is likely to keep interest rates on hold at the next meeting on February 1. In the US, inflation was higher than expected in December, with a gain of 3.4%. This was a rude surprise for the markets, which have become accustomed to inflation heading lower. The Fed won't be losing sleep over the upswing, as Core CPI, which is a better indicator of inflation trends, dipped lower to 3.9%. The rise in US inflation is a reminder that the battle to bring inflation back to the 2% target will be bumpy. The Fed has done an admirable job in lowering inflation but the final stretch is looking to be the most difficult. Services and housing inflation remains sticky and deflationary pressures from goods and energy have been fading. The markets have pared their expectations for a March rate cut to around 70% but the Fed has been pushing back against these expectations. Cleveland Fed President Mester said on Thursday after the inflation report that it was "too early" to cut rates in March because the inflation release showed that restrictive policy was needed to bring down inflation to the 2% target. GBP/USD is putting pressure on resistance at 1.2795. Above, there is resistance at 1.2826 There is support at 1.2742 and 1.2711
by OANDA
GBP/USD flat ahead of US inflation dataThe British pound is unchanged on Thursday, trading at 1.2741 in Europe. We could see some movement from the pound in the North American session following the release of the US inflation report. On Friday, the UK releases GDP, which is expected to show a 0.2% gain in November, after a 0.3% decline a month earlier. US inflation fell dramatically in 2023 and we'll get a look at the December inflation report later today. Inflation was running at a 6.5% clip a year ago and the Federal Reserve has done an admirable job in slashing the inflation rate in half. US CPI is expected to have edged up to 3.2% y/y in December, compared to 3.1% in November which marked a five-month low. Monthly, CPI is expected to have inched up to 0.2%, following a 0.1% gain in November. The Fed will be more concerned with core CPI, which is a better gauge of inflation than the headline reading. Core CPI is projected to have eased to 3.8% in December, after two straight gains of 4.0%. Monthly, Core CPI is expected to remain at 0.3%. If the inflation readings are wide of the estimates, we could see some volatility from GBP/USD. The Bank of England was in the spotlight on Wednesday, as Governor Bailey testified before a parliamentary committee regarding the country's financial stability. Bailey didn't offer any clues about monetary policy but expressed satisfaction that mortgage rates have been falling. The markets are confident that the BoE's rate-tightening cycle is over and that the central bank will start cutting interest rates in mid-2024. Bailey has stuck to a 'higher for lower' stance on rates but there is pressure on the BoE to consider rate cuts as inflation fell sharply in November to 3.9%, down from 3.6% a month earlier. Bailey may prefer to keep rates in restrictive territory until inflation falls closer to the 2% target before lowering rates. GBP/USD is testing resistance at 1.2722. Above, there is resistance at 1.2753 There is support at 1.2678 and 1.2647
by OANDA
Interest Rates and Inflation: Shaping GBPUSD's TrajectoryGreetings Traders, As we delve into the intricacies of GBPUSD for potential trading opportunities, the convergence of fundamental factors takes center stage. This analysis encapsulates the interplay between interest rates, Consumer Price Index (CPI) data, and central bank decisions for both the Bank of England (BoE) and the Federal Reserve. Examining the BoE's CPI data provides insights into the inflationary pressures faced by the UK. The most recent CPI figures on December 20, 2023, indicate a year-over-year inflation rate of 3.9%, slightly below the forecasted 4.3% and notably lower than the previous 4.6%. The gradual decrease in inflation suggests a potential easing of price pressures. However, it's crucial to note that even with this decline, inflation remains elevated. In tandem with the CPI, the BoE's interest rate decisions are instrumental in understanding the monetary policy landscape. As of December 14, 2023, the BoE has maintained a benchmark interest rate of 5.25%. This consistent stance signals the central bank's commitment to addressing inflation while providing stability to the economy. The interest rate differential between the BoE and the Federal Reserve plays a pivotal role in shaping GBPUSD dynamics. Contrasting this with the Federal Reserve's interest rate decisions, the FOMC has maintained a steady interest rate of 2.00% as of December 13, 2023. The relatively lower interest rate in the United States compared to the UK creates an environment where traders need to carefully navigate the potential impact on GBPUSD. Analyzing the broader context, the comparative interest rates and inflation trends suggest a nuanced landscape for GBPUSD. While the BoE grapples with elevated inflation, its commitment to a higher interest rate provides a counterbalance. On the other hand, the Federal Reserve's dovish stance, despite rising inflation, signals a cautious approach. This divergence in monetary policy contributes to the potential for GBPUSD upsides. In conclusion, traders eyeing GBPUSD for a buying opportunity around the 1.25900 zone should consider the complex interplay of interest rates, inflation, and central bank decisions. The nuanced analysis presented here aims to equip traders with a comprehensive understanding of the macroeconomic factors shaping GBPUSD's prospects, pointing towards potential upsides in the current market environment. Wishing you successful trades, Joe.
Long
by JoeChampion
3
The Euro will weaken against the GBPSummary The European Central Bank (ECB) will likely cut rates before The Bank of England (BOE), meaning potential downside on EURGBP. The Details European interest rate hikes have been successful - Euro Area inflation is around 2%. Mission accomplished. Easing rates is the next step after holding the current rate for a while. Cutting rates will weaken the Euro. European economic figures are poor, which adds conviction to rate cuts in the near future. On the other hand, the BOE will likely keep higher rates for longer. There may even be a final rate hike by the BOE. Inflation is still above 3%. Cutting rates anytime soon could be seen as irresponsible and is not likely. I expect EURGBP to reach weekly range support at 0.8250 in 2024. Price may even break the range support area. Things to Consider If the UK also signals recession, pressure to cut rates will increase. However, inflation should be the primary influence on rate decisions. EURGBP could move higher before it starts declining.
Short
by Samuel_Morton_Trader
GBP/USD shrugs after mixed UK dataThe British pound is drifting on Friday. In the European session, GBP/USD is trading at 1.2701, up 0.08%. UK retail sales jumped 1.3% in November m/m, bouncing back from 0% in October and beating the consensus estimate of 0.4%. This was the sharpest pace of growth since January and the increase was felt in all sub-sectors. Yearly, retail sales edged up 0.1%, after a downwardly revised decline of 2.5% in October and above the market consensus of -1.3%. The GDP report was less cheery, as second-estimate GDP for Q3 came in at -0.1%, compared to 0% in the preliminary estimate. This has raised concerns that the weak UK economy could tip into a recession, as negative growth in the fourth quarter would officially be considered a technical recession. GDP for the second quarter was revised downwards to no growth, compared to the initial estimate of 0.2%. The Bank of England will have to decide what to do with this mixed bag of data. The weak GDP could put pressure on the BoE to cut interest rates, but the sharp rebound in retail sales supports the central bank continuing its 'higher for longer' stance. The BoE has maintained the cash rate at 5.25% for three consecutive times. In the US, Federal Reserve members have been pushing back this week against market expectations for rate cuts next year. The markets have priced in up to six cuts in 2024, but the Fed members have said that the markets are getting ahead of themselves and Atlanta Fed President Raphael Bostic said he expected two rate cuts in the second half of 2024. On Friday, the Fed will get a look at the PCE Price Index, the central bank's preferred inflation indicator. The headline and core readings are expected to remain unchanged in November, at 0.2% and 0%, respectively. GBP/USD is putting pressure on resistance at 1.2720. The next resistance line is 1.2750 1.2636 and 1.2582 are providing support
by OANDA
FX Price Action Ahead on Growing Rate DivergenceLast week was busy for major central banks. During a 60-hour window, rates were set for 60% of the global economy, from the US Fed, the ECB, to the BoE. Central banks’ announcements caused a frenzy in markets. The pivot to a dovish stance by the US Fed contrasted sharply with hawkishness from the ECB. This paper summarizes rate announcements and their market impact. It also dives into Yen dynamics as the Bank of Japan (BoJ) meets tomorrow. CAUTION FX TRADERS: GROWING RATE DIVERGENCE AHEAD Renewed divergence in monetary policies was evident from rate announcements by the major central banks. After more than a year of moving in tandem, central banks’ stances are shifting. The Fed is signaling rate cuts sooner. Meanwhile, ECB and BoE insist that rates need to stay higher for longer to fight sticky inflation. As interest rates in the US remain elevated relative to other major economies, the Fed has ample room to slash sooner. Inflation in the EU has contracted at a rapid clip relative to the US. However, economists expect EU inflation to rebound in the near term with fading base-level effects. Inflation in the US is expected to average 2.4% in 2024 compared to 2.7% in the EU and 3.75% in the UK, as per respective central banks. The US economy is strong with robust economic growth, resilient consumer spending, and solid PMI numbers. FED HAS PIVOTED TO DOVISHNESS The FOMC opted to keep rates steady with their statement pointing to the end of the rate hiking cycle. Most notable was the Fed’s updated economic projections & dot plot. It showed faster-declining inflation, slower GDP growth, and faster rate cuts. The Fed’s dot plot of rate expectations guided towards three 25 basis point (bps) cuts next year. Markets were expecting five rate cuts before the Fed announcement. Following the Fed meeting, markets now anticipate six rate cuts. BOE REMAINS HAWKISH The Bank of England opted to keep rates steady with a hawkish pause. The BoE statement indicates further rate hikes if inflationary pressures remain persistent. “The full effect of higher interest rates has yet to come through, posing ongoing challenges to households, businesses and governments," ~ BoE Market Policy Committee ECB JOINED THE BOE WITH A HAWKISH PAUSE ECB decided to keep rates steady with a hawkish pause. ECB President Christine Lagarde asserted that rate cuts were not being discussed yet and rates may even need to go higher to bring inflation under control. ECB noted that tighter financing conditions were leading to demand contraction, which weighed on pushing down inflation. Economic growth is expected to remain subdued. ECB estimates gradual ramp up in growth from 0.6% for 2023 to 0.8% for 2024, and to 1.5% for both 2025 and 2026. BOJ DECISION IS MOST UNCERTAIN WITH A THORNY JOB ON HAND The Bank of Japan (BoJ) is set to announce their rate decision on December 19th. It has maintained ultra-low interest rates all year while others hiked aggressively. Recent statements by BoJ Governor Ueda signal a pivot away from the ultra-low policy. "Managing monetary policy will become even more challenging from the end of the year and heading into next year." ~ Kazuo Ueda, Governor, Bank of Japan on 6/Dec Governor Ueda’s statements have led to market expectation of upcoming monetary tightening in Japan. JPY has strengthened 6% relative to the USD over the last month. Despite Ueda’s statements, BoJ pivot remains uncertain. Inflation in Japan is running hot and above US inflation. Moreover, wage growth and economic growth in Japan have been moderate despite high inflation creating stagflation risks. Consumer spending and wage growth remain muted despite record profits. Feeble Yen is boosting Japanese exporter profits. Nevertheless, the BoJ has been setting up a change in monetary policy. Earlier this year, it raised the cap on JGB yields and eventually changed the cap from a rigid limit to a loose reference. Some economists consider this a prelude to eventual scrapping of the YCC altogether. CENTRAL BANK DECISIONS HAVE CREATED DEEP RIPPLES ACROSS MARKETS Commodity markets reacted positively to the rate announcements. The Fed’s signal of upcoming easing opened the door for commodity demand to rise. Precious metals are likely to benefit from asset rotation out of US treasuries while Crude will benefit from higher economic activity from lower interest rates. Equities surged on Fed pivot. Small-caps and Mid-caps outperformed the Nasdaq-100 and S&P 500. Both SPX and NDX also extended gains. Bond yields fell sharply following the FOMC decision. Yields fell to their lowest level in four months. One-year bond yields performed the best while thirty-year performed the worst. LEVERAGED FUNDS ARE BULLISH EURO, STERLING, AND BEARISH YEN Asset managers and leveraged funds are net long on Euro FX futures. Asset managers and leveraged funds are net short on Yen and Pound futures but have reduced net short positioning over the past few weeks. HYPOTHETICAL TRADE SETUP The Fed’s dovish stance plus the hawkishness of European central banks will result in dollar weakness relative to Euro and Sterling. Upside risks to the dollar persist with stronger economic data and inflation resurgence forcing the Fed to reassess its stance. To gain from the weakening of the dollar against the euro and sterling, investors can buy into CME Micro FX Euro and GBP futures. A long sterling provides higher upside than long euro given higher inflation in the UK. Policy uncertainty in Japan is unlikely to usher in a pivot in the short-term. The JPY is likely to weaken against the dollar despite DXY weakness. To harness gains from weakening Yen, investors can establish a long position in CME Micro JPY Futures. Hypothetical Trade 1 & 2: Long EUR and GBP Entry: 1.0960 Target: 1.1150 Stop Loss: 1.0860 Profit at Target: USD 238 (= 1.1500 - 1.0960 = 190 pips = 190 x 1.25) Loss at Stop: USD 125 (= 1.0860 – 1.0960 = -100 pips = -100 x 1.25) Reward-Risk: 1.9x Entry: 1.2720 Target: 1.3120 Stop Loss: 1.2490 Profit at Target: USD 250 (= 1.3120 - 1.2720 = 400 pips = 400 x 0.625) Loss at Stop: USD 144 (= 1.2490 – 1.2720 = -230 pips = 230 x 0.625) Reward-Risk: 1.75x Hypothetical Trade 2: Short JPY Entry: 139.57 Target: 146.28 Stop Loss: 137.97 Profit at Target: JPY 67,100 (= 146.28 - 139.57 = 671 pips = 671 x 100) Loss at Stop: JPY 16,000 (=137.97 – 139.57 = 160 pips = 160 x 100) Reward-Risk: 4.2x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME_MINI:M6E1!
by mintdotfinance
Post Bank of England Rate Decision AnalysisThe Bank of England (BoE) maintained a hawkish stance, keeping rates on hold at 5.25%, with votes kept at 3-0-6. With UK CPI reported at 4.6% in October 2023, the BoE views a longer-term fight to bring inflation back to its target range. The GBP gained strongly against the USD, with more upside potential as the BoE pushed back against the possibility of rate cuts. Technicals Price spiked up from 1.26 following the news, and is currently trading along the resistance area of 1.28 and 61.8% fib retracement level. Breaking the resistance level, the GBPUSD could trade up towards the next major resistance level and swing point from July 2023 at 1.3140
Long
by JinDao_Tai
GBP/USD - Pound edges higher ahead of UK job dataThe British pound is showing little movement at the start of the week. In Monday's European session, GBP/USD is trading at 1.2576, up 0.22%. It's a busy week for UK releases which could translate into volatility from the British pound. The UK releases employment data on Tuesday, GDP on Wednesday, followed by the Bank of England rate decision on Thursday. The UK employment report will be closely watched by the BoE, which is expected to hold the cash rate at 5.25% for a third straight time. The UK labour market has remained strong despite the BoE's aggressive tightening and high wage growth continues to drive inflation. The unemployment rate is expected to tick higher from 4.2% to 4.3% while wages including bonuses are expected to ease to 7.7%, down from 7.9%. BoE Governor Bailey had a hawkish message for the markets last week, saying that interest rates could remain at current levels for "an extended period" in order to bring inflation back down to the 2% target. Inflation has been falling sharply, but the current clip of 4.9% remains much higher than the target and the BoE doesn't want to encourage talk of a rate hike, which could ease financial conditions and push inflation higher. The markets, however, have priced in rate cuts in mid-2024. Friday's US nonfarm payrolls came in at 199 thousand in November, above the market consensus of 180,000 and higher than the October gain of 150,000. Unemployment dropped from 3.9% to 3.7% and average hourly earnings rose to 0.4% m/m, up from 0.2% in October and above the market consensus of 0.3%. The strong data points to a resilient labour market despite signs that the economy is cooling down, and has reduced fears of recession. The markets are still expecting four or five rate cuts in 2024, pointing to a deep disconnect with the Fed, which is insisting that hikes remain on the table. The strong nonfarm payroll report is a reminder to the markets that the US labour market remains strong, even if there are clear signs that the economy is cooling down. Tuesday's inflation report will be closely watched, as a stronger-than-expected reading would likely force the markets to temper expectations about rate hikes in 2024. GBP/USD is putting pressure on resistance at 1.2592, followed by 1.2682 1.2484 and 1.2369 are the next support levels
by OANDA
GBPUSD Short Trend at 1.27 before Bailey speech!The GBP/USD pair continued to experience gains during the American session, reaching a new monthly high at 1.2715 before a modest retracement. The British Pound maintains its strength against the US Dollar, with the GBP/USD comfortably trading above the 1.2600 level after touching Monday's peak at 1.2644, the highest since last August. The Governor of the Bank of England (BoE), Andrew Bailey, stated on Monday that achieving the 2% inflation target would be a challenging task. Despite the central bank raising rates to 5.25% between 2022 and 2023, Bailey acknowledged the negative impact higher rates can have on households but added that it is still too early to consider rate cuts. Inflation in the UK, measured by the Consumer Price Index (CPI), was 4.6% year-on-year in October, more than double the central bank's comfort level. From a data perspective, the UK's macroeconomic agenda is relatively light this week. The country released the October Retail Price Index (BRC), which showed a 4.3% year-on-year increase, an improvement from the previous month's 5.2%. From a technical standpoint, the market exhibits a strong upward trend after breaking out of the bullish channel, and personally, I anticipate a pullback towards 1.2530 before further upward movement with the goal of surpassing the supply zone at 1.2970 and subsequently retesting the upper part of the daily supply zone. Wishing everyone successful trading, greetings from Gaia.
Short
by UnknownUnicorn67331274
5
GBP/USD heading towards 1.2550, where history will be made!The GBP/USD continues to rise for the third consecutive session, supported by the speech of the Bank of England (BoE) Governor Andrew Bailey at the Henry Plumb Memorial Lecture on Monday. The GBP/USD pair is trading around 1.2530 during Tuesday's Asian session, approaching 11-week highs. The GBP/USD was last seen trading near 1.2470, where the 38.2% Fibonacci retracement of the downtrend from July to October is located. If the pair confirms that level as resistance, it could extend its downward correction towards 1.2430 and 1,2400. Despite the US Dollar (USD) facing strong selling pressure last week, weak inflation data in the UK has made it challenging for the GBP/USD to extend its uptrend. Meanwhile, British Prime Minister Rishi Sunak stated on Monday that they can start the next phase of fiscal policy and focus on reducing taxes now that inflation has halved. Sunak also noted that taxes can be reduced once inflation and debt are under control, adding that they want to support businesses to invest through lower taxes. All of this is pushing the price towards 1.2550. A crucial point where we could witness a technical confirmation of continuation or reversal. Today's and tomorrow's data during the London session will be interesting. At the time of writing, the daily chart does not show scenarios of a downtrend, but the market is unpredictable, so entry should only be made with the necessary confirmations. Personally, I will wait for the price around 1.255 and then look for M15/H4 for a long/short entry depending on technical confirmations. Comment and leave a like, greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
12
GBP/USD calm ahead of UK job reportThe British pound has edged higher on Monday. In the European session, GBP/USD is trading at 122.48, up 0.18%. The pound is coming off a nasty week, in which it declined 1.2%. The UK labour market has been resilient despite the Bank of England's aggressive tightening but is showing some cracks. We'll get a look at key employment numbers on Wednesday. Job growth is expected to fall by 80,000 in the three months to September, after a massive loss of 207,000 in the previous release. Average earnings including bonuses are expected to slow to 7.4% in the three months to August, down from 8.1%. The BoE will be keeping a close look at wage growth, which is a significant driver of inflation. The UK releases the inflation report on Wednesday, with the markets expecting CPI to have fallen sharply in October from 6.7% to 4.8%. If inflation falls below 5%, it would mark a milestone in the government's tough battle with inflation, although the 2% target remains far, far away. Core CPI, which excludes food and energy, is expected to show a modest drop to 5.8%, down from 6.1% in September. The BoE is projecting that inflation will fall back to the 2% target at the end of 2025, six months later than the previous forecast. Governor Bailey has been stressing that inflation remains too high, but the BoE nevertheless voted to hold rates at this month's meeting after 14 consecutive hikes. Another pause at the December meeting would be the central bank's preferred plan of action, but that will depend on the data. There is resistance at 1.2287 and 1.2344 1.2183 and 1.2091 and are providing support
by OANDA
GBPCHF: Looking like a fake out and drop to meI see GBP as continuing to be weak, poor GDP data last week, hikes expected to be over, and expecting to see some CHF strength. BoE interest rates this week, but with the market expecting hiking to be over, I don't think it matters what happens, sterling will fall. We saw a move above my descending trendline, seeing this as possibly a fake out - we've broken back through my support, now resistance line which would suggest a fall back down to recent lows here.
Short
by Finchcliffe
1
GBP/USD stems slide as GDP beats estimateThe British pound is steady on Friday. In the European session, GBP/USD is trading at 1.2219, down 0.02%. The pound is coming off a nasty four-day slide, in which it declined 1.19%. Today's UK's GDP numbers weren't pretty, but they managed to beat the forecasts, which has helped the British pound stabilize after a disappointing week. The economy flatlined in the third quarter, below the Q2 reading of 0.2% q/q but higher than the market consensus of -0.1%. Monthly, GDP eked out a gain of 0.2%, versus a revised 0.1% in July and above the market consensus of 0.0%. The lack of growth in the third quarter is nothing to cheer about, but at least the UK will avoid a recession this year, which is defined as two consecutive quarters of negative growth. High interest rates and stubborn inflation continue to squeeze consumers and businesses, and a sharp drop in house sales has dragged down the services sector. Consumers are in a sour mood due to the cost of living crisis and are expected to cut down on Christmas shopping. The Bank of England lowered its growth forecast for the fourth quarter at its meeting earlier this month when it kept interest rates unchanged. GDP is expected to rise just 0.1% q/q. Inflation is projected to fall back to the 2% target at the end of 2025, six months later than the previous forecast. Governor Bailey has been stressing that inflation remains too high, but the BoE nevertheless voted to hold rates after 14 straight increases. Another pause at the December meeting would be the central bank's preferred plan of action, data permitting. There is resistance at 1.2287 and 1.2344 1.2183 and 1.2091 and are providing support
by OANDA
1