Friday May 15, 2021
The GBP is treading water at the moment, going nowhere in particular. The UK economy will probably be the best performer in the G7 during 2021.
However, there are some notes of caution being reported in the UK press. today. They are talking about the rapid growth in parts of the UK, of the Indian variant of covid. This increase could rock PM Boris Johnson’s planned re-opening of the UK economy. It may impact the GBP in a negative way for the short term.
The GBP is consolidating in a range trapped between support at 1.4000/1.3990 and resistance that can be found in the 1.4070/80 area.
The overall trend for the GBP remains bullish, and it is expected to break resistance, and move on up towards 1.4150/60. However, it is not clear if the downside correction is over yet.
We cannot rule out more probes towards 1.4000 and if broken it would allow the GBP to drop to strong support at 1.3940.
The JPY remains the currency most likely to be the victim of US Inflation, being extremely sensitive to US Bond Yields. However, with softer US yields overnight, the GBPJPY slipped from its 154.30 highs to test daily support at 153.40/50.
Resistance remains at 154.30/40 which I think may be the top for the week. If broken will will see a GBPJPY advance to 155.00
Dips are seen as a buying opportunity, particularly if we are able to get a bigger correction to 152.40/60.
The GBP met our initial target at 1.2800/10 after the break of pivot 1.2740 earlier this week. However, the GBP has been unable to build on the break, and has slipped back below 1.2740.
While GBPCHF remains below 1.2740, there is a good chance for a deeper correction towards 1.2660/80 Support.
If the GBP can break back above 1.2740, it will push on for another run at 1.2780/1.2800.
To learn more about how to use technical analysis in your trading contact email@example.com
Analysis from charts provided by http://www.eightdragonscapital.com