The GBP/USD has plunged aggressively in yesterday’s trading session,
has resumed the bearish momentum today and
now has touched a very important confluence area, the price has decreased even
if the USDX has decreased a little. The Cable has decreased today, even if the
Manufacturing PMI has increased from 49.4 to 50.1 points, the manufacturing
sector has jumped in the expansion territory after one contraction month. Unfortunately
the other UK’s fundamental events have disappointed a little and have pushed
the Pound down versus its counterparts, the Net Lending to Individuals have
decreased from 9.2B to 1.6B in April, while the Mortgage Approvals have dropped
to 66K, lower compared to the 68K estimate. Moreover the M4 Money Supply has decreased by 0.1%, even if the traders
have expected a 0.2% growth.
The USD has received a helping hand from the ISM Manufacturing PMI
indicator, which has increased from 50.8 to 51.3 points, has exceeded the 50.5
prediction, the manufacturing sector continues the expansion and has reached the
highest level of the last two months, while the Final Manufacturing PMI has increased
from 50.5 to 50.7. The Construction Spending has plunged by 1.8% eve if the
estimate was 0.5%, but the USD has received another boost from the ISM
Manufacturing Prices, the economic indicator has increased from 59.0 to 63.5
The US dollar could squeeze a little in the coming days, despite the
good data, looks like that the United States currency is too overbought to be
able to stay higher right now, a short decrease could bring us another long opportunity
on the USD in the coming weeks as the Federal Reserve could increase the interest
rate in June 15 or later in July.
You should keep an eye on the economic calendar tomorrow because the
calendar is filed with high impact economic data from the US and United Kingdom.
The price has decreased again below the upper median line of the
medium term descending pitchfork and has invalidate the breakout from the last
week, the pair has decreased eve below the lower median line (lml) of the
ascending pitchfork and now is challenging the sliding parallel line, which
represent a crucial support on the short term, actually the price has touched an
important confluence area formed at the intersection of the sliding parallel line
with the mini median line of the mini descending pitchfork.
GBP/USD could rebound in the coming days if the confluence area will
reject the price, the pair could increase till will reach the major confluence
area formed at the intersection of the upper median line of the descending
pitchfork with the lower median line of the ascending pitchfork, we’ll have a
good opportunity to go short on this pair if the price will test the confluence
area and will stay under the UML.
You can see on the H4 chart that the price has found intraday
support right above the sliding parallel line, the bearish momentum could resume
only if the price will ignore the confluence area. The GBP/USD could become
strongly bearish if will slip below the minor median line of the short
descending pitchfork (ml).
About The Post
About The Forex Analyst
Has graduated a Master in Business Administration, Trader/ Market Analyst on the financial markets (forex, commodities, index, stocks, futures, cryptocurrencies) for more than 7 years. Founder and Market Analyst at http://ovtbusiness.com/