It looks like the GBP is taking a pounding, quite literally. Yesterday, Theresa May failed to pass the Brexit bill smoothly in the House of Lords. This will potentially delay triggering of Article 50 which will set the Brexit ball rolling. It is important to note that most of OECD economies are heavily shaped by consumer sentiments and expenditure. Right now, consumer spending is not at all times high and what is worrying according to data collected by BRC is the rate at which non essential items are being shun. Prices are soaring thanks to the accommodative monetary policy in place and inflation is washing away the Pounds purchasing power. There are no other data expected today other than those from the USD. Today, in the NY session, the ADP Nonfarm employment data will be released. The consensus is for employment levels in the private sector to tick lower. CHF CPI is expected to rise from 0.05 to 0.2% according to analyst. If this beat expectations, then the bear rally for this currency pair will resume.
For this currency pair, I will look to enter short. Price action is strongly bearish in the weakly and daily charts. The 30 minute chart shows imminent trend resumption with price action testing the 61.8% Fibonacci level drawn from yesterday’s high low. The plan is to wait till a bear candle is printed at any of the Fibonacci levels-from 38.2-61.8 levels, and then short after it closes. Stop loss should be above the 0 %( Yesterday’s highs)-23.6% Fibonacci level and take profit at 161.8% Fibonacci extension. This will be at December’s low.
So trade out as follows:
Stop Loss: 0.7095
Take Profit: 0.7
Have a good trading day.