Trade Of The Day: GBPUSD Stay Bearish For 1.40 Test
Trade Of The Day: Despite data showing the UK unemployment rate in December fell to its lowest level since 2006 at 5.1%, the markets were disappointed by the slower than expected average earnings growth. Wage growth in the UK rose by 2%, slowing from the prior data of 2.4% and further delaying a BoE rate hike. As mentioned by BoE Governor Carney, he would like to see wage growth at or above 3% before considering a rate hike.
Technical: While 1.4250 caps upside reactions expect a grind lower to test bids at 1.41. Only over 1.45 eases immediate downside pressure.
Trade Idea: I am monitoring Cable for a potential symmetrical corrective swing to match the move that played out towards the end of December as highlighted in the chart below by the first blue shaded box, which I have overlaid against the current cycle low. This price pattern suggests a move to test offers towards 1.4250/1.43 where i will be looking of intraday reversal patterns to set shorts leaning against 1.44 for a continuation of the trend sequence which projects a test of 1.38 as the ultimate objective, with 1.40 the first objective for this trade.
Trading Update – Shorts from 1.4310 stops to entry
Trading Update – Shorts from 1.4310 stops to 1.4210