GBP/USD: UK Employment Game Plan- Constructive Above 1.44
DailyFX.com -
Talking Points
GBPUSD 1.44-1.4530 key range in focus ahead of UK Jobs Report
Updated targets & invalidation levels
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GBPUSD 30min
Chart Created Using FXCM Marketscope 2.0
Technical Outlook:Last week I noted that, “From a trading standpoint, the move off parallel resistance noted last week remains in focus and I would be looking for support heading into the lower median-line parallel (blue)...” Sterling opened the week at this parallel on building divergence and we’ve been tracking this rally on SB Trade Desk since the open. Heading into tomorrow’s U.K. employment releases, the immediate focus remains higher / looking to buy pullbacks while above confluence support at 1.4405 with a break below the weekly open at 1.4346 needed to shift the near-term outlook back to the short-side.
Near-term resistance stands at 1.4528/33- a region defined by last week’s high and the monthly high-day close (that was the day we tested & failed at the 2016 open 1.4730). A breach higher eyes subsequent resistance objectives at the February high-day close at 1.4588-1.46, an area where the near-term rally would start to look vulnerable. We’re also tracking a similar setup in GBPJPY. Keep in mind we also FOMC Minutes tomorrow and UK Retail Sales on Thursday.
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A summary of the DailyFX Speculative Sentiment Index (SSI)shows traders remain net long sterling- the ratio stands at just 1.10 (52% of traders are long)- weakbearish reading
Yesterday the ratio was 1.27; long positions are 7.6% lower than yesterday and 4.2% below levels seen last week
The recent reduction in long exposure suggests the immediate pullback bias remains at risk near-term
Open interest is 1.4% lower than yesterday and 0.3% below its monthly average
Why and how do we use the SSI in trading? View our video and download the free indicator here
Relevant Data Releases This Week
Other Setups in Play:
EUR/USD at Support Ahead of US Retail Sales- Resistance into 1.15
GBP/AUD: Beware of Near-term Exhaustion- Resistance 1.9854/86
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---Written by Michael Boutros, Currency Strategist with DailyFX
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