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  • GBP/USD Forecast – British Pound At Clear Risk of Further Declines Vs Dollar

    GBP/USD Forecast – British Pound At Clear Risk of Further Declines Vs Dollar

    • – The British Pound declined below 1.2460 against the US Dollar, igniting more downsides.
    • – The GBP/USD pair broke a major contracting triangle pattern with support at 1.2470 on the 4-hours chart.
    • – In the UK today, the Construction Purchasing Managers Index (PMI) for March 2017 released by both the Chartered Institute of Purchasing & Supply and the Markit Economics posted a decline from 52.5 to 52.2.

     

    UK Construction PMI

    Today in the UK, the Construction Purchasing Managers Index (PMI) for March 2017 was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The market was positioned for a decline from the last reading of 52.5 to 52.4.

     

    However, the outcome below the forecast, as the UK Construction PMI posted a decline from 52.5 to 52.2. However, the business activity was positive and gained momentum in March to record its second-highest since December 2015. Commenting on the report, the Senior Economist at IHS Markit, Tim Moore, stated “UK construction firms experienced a growth slowdown in March, with the loss of momentum centred on house building. A weaker trend for residential work has been reported throughout 2017 so far, which provides an indication that the cooling UK housing market has started to act as a drag on the construction sector”.

     

    Overall, the market might not like the result, and GBP/USD could continue to move down towards the last swing low of 1.2376.

     

    GBP/USD Technical Analysis

    The British Pound after trading as high as 1.2555 against the US Dollar started moving down. The GBP/USD weakened a lot and traded below the 1.2500 and 1.2480 support levels. The most important break was below a major contracting triangle pattern with support at 1.2470 on the 4-hours chart.

     

    GBP/USD Technical Analysis British Pound US Dollar

     

    The British Pound buyers were also able to break the 50% Fib retracement level of the last wave from the 1.2376 low to 1.2555 high at 1.2465. Furthermore, the 100 simple moving average at 1.2470 was also cleared to open the doors for more declines.

     

    Since the pair is now below many important supports, there are chances of it retesting the last swing low of 1.2376. If sellers remain in action, GBP/USD may even decline towards 1.2350.

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  • GBP/USD – Double Bottom In Making For British Pound

    GBP/USD – Double Bottom In Making For British Pound

    • – The British Pound recently traded near 1.2200 twice against the US Dollar, but failed to break it.
    • – It looks like a double bottom pattern is forming near 1.2200, looking at the 4-hours chart of GBP/USD.
    • – In the UK, the PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics posted an increase from 52.8 to 54.2 in Dec 2016.

     

    UK Construction PMI

    In the UK today, the PMI Construction that shows business conditions in the UK construction sector was released by the Chartered Institute of Purchasing & Supply and Markit Economics.

     

    The market was expecting no change from the last reading of 52.8 in Dec 2016. The result was better than the forecast, as there was an increase from 52.8 to 54.2 in Dec 2016. Commenting on the report, the Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI, Tim Moore, stated “December’s survey data confirmed a solid rebound in UK construction output during the final quarter of 2016. All three main areas of construction activity have started to recover from last summer’s soft patch, but in each case growth remains much weaker than the cyclical peaks seen in 2014”.

     

     

    Overall, the market trend and sentiment are positive for the British Pound, which may lift it towards 1.2300 against the US Dollar.

     

    GBP/USD Technical Analysis

    The British Pound made a couple of downside moves, and tested the 1.2200 support area. The stated level acted as a barrier and prevented downside moves on more than two occasions. So, there is a chance that the GBP/USD is forming a double bottom pattern near the same area.

     

    GBP/USD Technical Analysis Pound Dollar

     

    The pair is already trading higher, and broke a bearish trend line on the 4-hours chart at 1.2250. Moreover, the pair is also above the 38.2% Fib retracement level of the last drop from the 1.2387 high to 1.2200 low.

     

    So, there is a chance that the pair may head towards the 50% Fib retracement level of the last drop from the 1.2387 high to 1.2200 low at 1.2293. If the British Pound buyers remain in charge and the double bottom pattern plays well, there can be more upsides with a possible test of 1.2300-10.

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