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GBPUSD is testing 61.8% Fibo retracement

Friday, May 17, 2019 11:34 AM GMT

A potential make or break reversal is happening at the GBPUSD pair.

Daily chart

The pair is currently testing:

  • the Fibo 61.8 level, defined from the December’s lows and the March’s high.
  • the Ferbruary low
  • the daily lower Bollinger Band

 

Hourly chart

At the 1hour chart a falling wedge pattern is getting shape.

The macroeconomic picture remains unchanged:

Strengths:

  • Upward revision of GDP growth from the BOE (1.2% February’s expectation, 1.5% May’s expectation) coupled with Governor Carney’s comment that “it will require more, and more frequent interest rate increases, than the market currently expects”. His comment is valid, provided that there is a bounce in investments and hiring
  • Unemployment is expected to further fall to 3.5% by 2022.
  • improving macro releases: GDP, retail sales, unemployment, industrial production, construction PMI, Service PMI, wages, trade balance, increasing public sector net borrowing, high street lending, lending to individuals, home prices

 

Weaknesses:

  • polls for the EU elections that will take place on May 26 are presenting the Nigel Farage's Brexit party in the first place. 
  • property values predicted to fall by 1,25% within 2019, according to the BOE
  • deteriorating macro releases: average earnings, consumer's confidence, current account, M4, Business Investments, Manufacturing PMI, construction output, manufacturing production, industrial order expectations

 

Monetary Meeting:

  • Next Monetary Meeting of the Bank of England is scheduled on 20 June 2019.

 

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.Opinions expressed in the report do not represent the opinion of Zulutrade and do not constitute an offer or invitation to anyone to invest or trade.

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