A1 Trading Company

Ticker tape by TradingView

July 13, 2021

GBP/USD Deep Dive: Pound Starting A New Wave?

Bart Kurek

Looking back to 2009, we can see that price usually tends to move choppy in a range for a couple of years, then break out and use the same previous support level as a new resistance level. Between 2009 and 2015, 1.425 was a clear support level in the enormous range. However, once we saw the break, looking back at the past couple of years from 2017, this same level is now our significant resistance level, and we can see price taps and reverses from this level.

We have recently seen price break out of the long-term ascending channel, which it had been travelling in since the Covid outbreak back in March 2020. We could potentially be seeing the start of a new trend forming, possibly a downtrend now? Price has not broken the high in March yet, and therefore if we continue to see price head lower, forming lower highs and lower lows, it will be evident that price is forming a new descending channel or trend.

1.375 is a medium-term level which price has been respecting as support recently as previously it has been seen as resistance. If we see price break through this level and head lower, it will be clear that price will actually continue heading lower, and form the new trend mentioned earlier.

Looking at retail sentiment, G/U traders are actually quite mixed on this market, as there isn't a clear one-sided bias yet. Sentiment is mixed and traders are essentially waiting on the next confirmation of whether price is heading or lower in the next couple of months.

Traders are focused on the inflation data coming out later and is expected to grow 0.5% m/m in June. Inflation is projected to increase 4.9% y/y. Core Inflation Rate is expected to grow by 4%.

The key question traders are waiting for, is whether the inflation rate will get above the 5% mark. The Fed has recently managed to calm markets, and most traders believe that inflation remains under control and current inflation rate is temporary. If the inflation rate exceeds 5%, the USD may get more support as higher inflation may force Fed to raise rates sooner than expected.

More on USD news this week which will affect GBPUSD here.

A1 Edgefinder

#1 Market Scanner Tool
Take 10% off using code "READER"
GET ACCESS NOW
Want to See Our Trades?

Join The VIP Community!

Our entries, exits & analysis
Live Webinar Coaching
Trading Chatrooms
Strategy Library 
Exclusive Trading Guides
Use Code "READER" for 10% OFF!
JOIN NOWJoin FREE Discord
Listen to More Episodes
Why the New FOMC Decision Matters

Yesterday, the Federal Open Market Committee (FOMC), the Federal Reserve’s policy-making body, implemented yet another 75 basis point interest rate hike. While this move was perfectly in line with market forecasts, Chair Powell’s comments following the subsequent press conference, in which he discussed the FOMC’s new set of economic projections, were significant. He continued to […]

Read More
Shocking CAD Inflation News

Statistics Canada released a surprising new batch of inflation data this morning: month-over-month CPI failed to meet market forecasts, declining by 0.3% instead of the anticipated 0.1%. Rather than being an outlier, the other measurements of CPI mostly followed suit, as both year-over-year Trimmed CPI and Median CPI likewise failed to meet expectations. Trimmed CPI’s […]

Read More
2 Paths for Aussie Bears

At 9:30 pm Eastern Time tonight, the Reserve Bank of Australia (RBA) will be publishing their latest round of monetary policy meeting minutes. While there is a chance that their intentions could come across as more hawkish than expected, they currently have little reason to be. Despite relatively low unemployment at 3.5%, steady GDP growth, […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram