Today, technical indicators are pointing for the Pound to rocket higher from the current lows. In recent days, even after the OPEC deal, the Canadian dollar seems to be on the receiving end and making losses despite anticipation for higher oil prices and the fact that FEDs hiked rate which is supportive for commodities.
In the daily chart, price is hovering around the support of a bullish flag and most importantly, there is an oversold stochastics. With this combination, price will most likely edge higher in coming days and perhaps clear the upper resistance trend line of the flag with targets at 1.69-1.71. Fundamentals expected today is the m/m CPI at 1430Hrs London time with consensus at -0.1% from last month 0.2% and then Retail sales 0.7%e from 0.0% recorded last month. Core CPI will be released at a tentative time but then it’s expected to be lower and in sync with headline CPI.
Our strategy for today is simple, we remain bullish on the GBP and therefore we look to buy at all lows or if not, a buy stop shall be placed in the 1Hr chart. We have drawn a resistance trend line from 14.12.2016 highs and 16.12.2016 highs and this trend line was broken today late in the NY session. As observed, right now there is a bullish candlestick which formed and reversed at this trend line. I shall look to enter at the close of this candlestick and hold this for sometimes till a sell signal forms in the daily chart.
So, trade as follows:
Buy Stop: 1.6615
Stop Loss: 1.6580
Take Profit: 1.71-1.74
Have a good trading day.