- Analytics
- Technical Analysis
GBP USD Technical Analysis - GBP USD Trading: 2017-09-14
Rising inflation supports British Pound
UK inflation rose 2.9% in August, above expected 2.8% gain. Will the British Pound continue strengthening?
The UK recent inflation report was upbeat: consumer prices rose 2.9% on year in August when a 2.8% gain was expected following 2.6% advance in July. The next day Office of Statistics data showed unemployment in three months to July fell to 4.3% from 4.4% but wage growth remained steady at 2.1% over year. While the Bank of England is widely expected to leave its key interest rate at 0.25% at its meeting today, leaving unchanged also the size of its asset purchase program at £435 billion, there is a chance the number of dissenting votes could rise to three from a 7-2 split in favor of keeping rates on hold and the central bank may strike a hawkish tone in light of rising inflation.
On the daily chart the GBPUSD: D1 is above the 200-day moving average MA(200).
- The Parabolic indicator gives a buy signal.
- The Donchian channel indicates an uptrend, it is tilted up.
- The MACD indicator is above the signal line and the gap is widening, which is a bullish signal.
- The stochastic oscillator has fallen back from the overbought zone.
We believe the bullish movement will continue after the price breaches above the upper Donchian boundary at 1.3328. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 1.2851. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.2851) without reaching the order (1.3328) we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
Position | Buy |
Buy stop | Above 1.3328 |
Stop loss | Below 1.2851 |
Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.