Today’s main event is the UK’s second estimate of the 3rd quarter GDP. Well, even though we know that the Pound is trending on thin ice given the risks associated with Brexit and the possibility of a bitter divorce not ruled out, the recent announcements from the UK has helped shore this currency a little bit.
We can begin with the inflation dependent Fed who were clear that even though inflation pressures were initially thought to be transitory, there were more underlying disinflatory factors that were negating price growth despite robust labor conditions. This supported the GBP somehow.
Next we had the OBR office slashing GDP growth prospects for 2017 to 1.5% down from 2% as announced in March. However, shortly afterwards, the GBP recovered following Hammond’s comment.
Hammond said that stamp duties for first time property buyers of up to £300K will be done away with. Of course that was positive and the GBP rebounded.
In the daily chart, GBP should break and close above this minor wedge to be in charge otherwise, Yen bulls could drive prices lower.
Already we have that buy signal despite that break below the 20 period MA on November 8 and price action is off support trend line. Also don’t forget that current price levels are at the support-previous resistance line.
In the 4HR chart, it is obvious that price action is trending within a descending channel and as it is, price action has broken above the minor resistance trend line as just shown by that bullish candlestick.
Trade as follows:
Stop Loss: 147.80
Take profit: 150.30
Enjoy your weekend