Nearly everything about Friday’s NFP was pro-USD but surprisingly, the USD still continued to edge lower. Average weekly earnings came in as expected recording a solid 0.3% gain in April after a 0.2% gain in March with an additional 211K jobs created in the world largest economy. This positive data went ahead and proved that last month’s job data was all about the weather and that the economy was doing just fine and edging closer and closer to what Trump wants-an ideal close to zero unemployment rate and going by data, so far so good-a 4.4% unemployment rate is what Spain can only dream of. Looking to trade this pair can hint that the beginning of a USD decline is on the cards if not in progress. The chart and numbers don’t lie. This is the 3rd month of the pound strength and if you zoom in further in the weekly and daily charts, you won’t miss the strong upward momentum with upper BB hugging forming in the weekly chart.
From my analysis, it’s only safe to sell the USD at the moment. Macron is already president elect and as the Euro strengthens, so will the Pound. A buy signal was printed in the monthly chart late last year and after months of consolidation, the pound broke and moved higher. I will trade this pair with entry specifically in the 4HR chart within the 1.287 and 1.294 ranges. This will turn out as follows:
Buy limit: 1.287-1.294 when there is a buy signal which I will give an alert
Stop Loss: 1.28
Take Profit: 1.345- immediate resistance line in the weekly chart or a 1:2-3 risk reward ratio
Have a good trading day.