Yesterday the market was subdued to say the best and other than the swing observed in the GBP pairs, the market was waiting for a go ahead and assurance that the health insurance issue had been put to rest. It look like so and now the focus and shift in sentiment most likely look like GOP and Trump can focus on other market moving activity that are less complicated and at least doable. These include regulatory requirement s and tax reforms that should inject some momentum to the USD. Today we expect Governor Poloz and Yellen to speak and while there is a shift in sentiment and the tightening agenda is being adopted by various regulators, their comments will be market moving. Political moves will also shape the market, especially now that Theresa May is expected to officially pull the Brexit Trigger. The market looks settled and already has priced in a possible GBP depreciation. Remember, from yesterday, the GBP has been reversing after that spectacular two weeks rally. Today, there was a sell off. All GBP pairs are sliding.
My advice is to sell the GBP and move with the developing bear trend. I would also recommend buying the AUDCAD and dump the Euro. These commodity currencies are today’s top performers. For the EURAUD in focus, notice that double bar reversal in the daily chart. You should first of all not the bearish divergence that formed on 13.03.2017 and yesterday’s 27.03.2017 highs. Price was moving higher while the stochastics and momentum was trending lower. The stochastics are actually oversold and a sell signal has been formed.
The trick is to enter in the 30 min chart after today’s candlestick has closed at the following probable reversal positions.
Sell Limit: 1.42, 1.4230
Stop Loss: 1.4280
Take Profit: 1.4060, 1.3560-key support zones in the daily chart.
Have a good trading day.