We saw inconsistencies around the greenback last week. The Japanese Yen and the Euro were among the currencies that finished higher than the greenback last week. Though we had positive economic data from the U.S the previous week, the dollar didn’t quiet match up to expectations as political risks continue to instill wary in market participants. The political climate remains to be a threat. We also had the Federal Open Market committee energizing the dollar due to its hawkishness but failing to hold on to some of its gains after that. Yellen stated that rate increases would be appropriate. Most of the FED committee members shared the same sentiment. Though the CME Fedwatch tool shows that there’s only a 18% chance that rates could be changed in the next FOMC meeting on the 15th of March. The minutes from February’s monetary policy meeting will be published on the 22nd of February 2017(Wednesday).

GbpUsd Daily Chart

The pair has been trading within an asymmetrical triangle this month. It is now close to the apex of the triangle and a breakout is immanent. Price opened between the monthly pivot and MM3 at the beginning of the month. It is currently at support at 1.24000

GbpUsd H4 Chart

Price opened between the weekly pivot and WM2 at the beginning of the week, an area where bulls are most likely to buy at. Though the angle separation on the market action moving averages is not that great, they still maintain a bearish sentiment on this pair. It would only make sense that price breaks down beyond 1.2400 with 1.23500 eyed as the next support. If it breaks above 1.24500, it would then have to respect resistance levels it created when it was moving down.

GbpUsd H1 Chart

I am not expecting price to break above 1.2500. I will be looking for selling opportunities off the 1.24500 psych also considering that bears are most likely to sell of the 21.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.