GBPUSD Fundamental analysis
Upcoming week will be a decisive one for the cable. For one reason there is the speech of Carney on Tuesday the 5th. The financial world is eager to learn the policy-developments of GBP, especially after the Brexit. In his last speech he did stress on uncertainty. However, he also gave clues that BOE is well aware of the situation, and also is well prepared for any volatility that lies ahead.
BOE Gov Carney Speaks
ISM Non-Manufacturing PMI
FOMC Meeting Minutes
Manufacturing Production m/m
ADP Non-Farm Employment Change
Crude Oil Inventories
Average Hourly Earnings m/m
Non-Farm Employment Change
However the main one to look for is on Friday the 8th – the non-farm payrolls.
GBPUSD Technical analysis
In terms of price, the cable closed a net of 195 pips below previous week’s close and 176 pips below the open after a messy range-bound corrective move. The market opened with a gap against the pound at 1.34224 and the week’s closing price was 1.32459.
In an investment perspective there are two different GBPUSD wave counts for the cable. But our preferred count forecast an upcoming 4th wave within a C wave of a higher degree. However, this is on a long term weekly chart. Lets analyze a short term chart for possible opportunities for the upcoming week.
Trendlines on the chart are used to isolate the structure and not to suggest that price should travel in between. However a flat or a triangle correction is of high probability, simply because there 3-3 subwave count so far. The next wave should give us a clue about the corrective pattern in the making.
GBPUSD hourly chart wave analysis
WXY possibility: If price reaches around the C point (above the end of wave A) with 3 subdividable waves (ABC or WXY of lesser degree) then we will rename the ABC on the chart as WXY.
ABC Flat possibility: If the expected C wave is completed with a 5 wave impulsive structure, then we will consider it as a Flat correction. However, the look and feel of the pattern so far does not fit to the profile of a Flat.
ABCDE Triangle possibility: Since triangles are of 3-3-3-3-3 subwave structure, if the market creates the C wave with 3 containing subwaves (in the triangle context,) without breaking the end of A wave, then we may expect waves D and E to come within the same range.
Short term wave analysis
Assuming the small 15 minute correction (marked by a channel) is complete with a possible ABC or WXY of an even lesser degree, very short-term forecast is for the price to reach 1.34000 level. Although its short term, there is around 125 pips to be made, if the trade goes according to plan.
In conclusion, GBPUSD is in a correction (corrective pattern to be resolved,) hence the expectation is still back and forth movement for the upcoming week. Nevertheless, there is a short term 15 min opportunity to go long targeting 1.34000 level.