The USD looks like it will gain traction going forward. With the US-10 year treasury bills recovering-it is up almost 5 basis points, capital will start shifting towards the USD as yields becomes attractive. If it does, precious metals-both Silver and Gold will likely dip as risk off takes shape. I will also be looking at how US related economic indicators will influence USD.
To begin with, yesterday’s better than expected Retail sales and CPI data helped spurred the USD. Against the Yen, it gained 100 pips. Then again today, the House shall be voting on Tax reforms while the senate finalize their bills by tomorrow.
There are many contentious subjects to be discussed among them being issues around individual taxation and corporate tax plans. Democrats want the latter to be made permanent while individual tax reforms to be made temporary to at least 2025.
The GBP is highly dependent of what comes off the Brexit negotiation table. Other than yesterday’s positive Retail sales data which beat expectation and shore the cable which was on a free fall, technical indicators are pointing higher.
The Monthly chart for example has a buy signal printed. GBP bulls have been slowly but steadily pushing prices higher and above the 20 period MA. In the 4HR chart, there is a buy signal and price action is trending around minor resistance trend line. If GBP push higher and close above that level it means the next bull target will be around ¥151 and ¥152.
Trading will be as follows:
Buy stop: 149.50
Stop Loss: 148.50
Take Profit: 151.50
Have a good trading day

GBPJPY 4HR chart-November 16, 2017

Source: Dalmas FX

GBPJPY Monthly chart-November 16, 2017

Source: Dalmas FX

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