Important Labor data will be released today in the European session and all pointers are indicating GBP strength. Anyway, yesterday it was busy charting its way up and rebounding from critical Fibonacci levels in the daily chart. After last year’s GBP weakness, it found some support at 1.57 lows and has since rebounded to the current levels. Despite Brexit fears, there are other considerable political events like the coming French elections and US-Russia-China relations that could cause market swings. From today’s data, Claimant Count Change is expected to increase to -3.1K from last month’s 11.4K with unemployment stabilizing at 4.7%. Economists are also expecting wages to expand at a rate of 2.2% and maybe this is the reason why more and more people are spending their money on services. BoC decides on their interest rates today. It is widely expected to remain unchanged at 0.5% but what you should do is focus on what Poloz has to say.
Technically, the GBP is ranging upwards. As you can see from the daily chart, price action in February and March were ranging and price broke upwards only to reverse sharply at highs of 1.6960. Price then trended lower towards the 38.2% Fibonacci Hi-Lo from where it bounced. The monthly chart hints of bullish development. As observed, price has been moving away slowly and steadily away from the lower BB with overbought stochastics and volume of longs building up as shown by the positive slope OBV. Furthermore, 2010-2012 highs are now acting as support.
Today, look to trade as follows:
Buy Limit: 1.6570-1.6610 with an oversold stochastics in the 30 min chart.
Stop Loss: 1.6530
Take Profit: 1.6950
Have a good trading day.