May 19th, 2021
UK CPI for April is released later today in early morning London.
This number will almost certainly define the direction for GBP trading, until the US Federal Reserve release the minutes from their April meeting later tonight. Economists are predicting headline UK CPI to hit 1.4% in April up from 0.7% the previous month.
The FOMC minutes are expected to do the US Dollar no favors, with their usual mantra of no policy change until full US employment is achieved. Oh, they don’t care about above target inflation either.
Its pretty clear that the line in the sand is drawn at 1.4220/40, having had several cracks at trying to break higher the GBPUSD has settled just below this resistance.
As I mentioned that todays defining moments will probably be UK CPI and the FOMC. Should the CPI not come in as expected I would expect a drop to support at 1.4140 however a deeper correction it 1.4080 is possible.
If the GBP can break out above 1.4240 the next target would be 1.4310 which was last seen about 3 years ago!
The outlook for GBPJPY is still very bullish, although it is finding it difficult to break 155.00
Dips back to the previous area of resistance 154.30/40 has found buyers. However a break down here would likely see a test of 153.90 and possibly 153.30 support, which would provide a great buying opportunity.
If we do break 155.00 some time soon the next target for the GBPJPY would be 155.60 even 156.00 in extension.
GBPCHF broke back up through the pivot point of 1.2740 and had a run up towards 1.2800. Since then it has drifted lower to 1.2740. Provided this area of support holds we will see the GBP make more gains toward 1.2800 and beyond.
However a clean break below here at 1.2740 opens up a drop to 1.2680 and possibly 1.2620.
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