GBP Trader

May 21st 2021

Today is of course PMI Friday, as we look forward to preliminary PMI’s from across the world. However, the UK kicks off the next round of data with its Retail Sales for April in early London trade. I am not sure how I could have functioned with such an early Friday morning data release, particularly as indoor drinking is now permitted in pubs. A couple of double expresso’s and a handful paracetamols might have been helpful.

The April Sales YoY figure is going to be huge, somewhere north of 35%. Remember this time last year the UK population was locked in their homes watching Netflix.

The month on month figure needs to show a number of around 4.5 to keep a warm and fuzzy feeling towards the GBP.

Then just a few hours later we get UK Preliminary PMI’s for May, everyone seems to agree the number is 60. 3 or 60.1, but that’s good enough to keep cable bid on dips.

GBP/USD

The Pound will be influenced first by the UK data released, which looking at the recent price action is assumed to be supportive. Then tonight’s US PMI, really needs to impress or we could see the GBP close the week on a high.

Resistance at 1.4210/20 was pretty stiff earlier in the week and it I should imagine there will still be sellers around these levels.

This morning you will find day trade dip buyers below 1.4170 and again at 1.4140 looking for another test of 1.4220.

The GBP had very strong support on the recent correction down to 1.4110/20 yesterday.

Even if todays data disappoints sentiment for the GBP Is such that any dips are currently seen as great opportunity to get long, before we trade higher again.

GBP/JPY

The GBP is trying to break up through resistance in the 134.40 area if it can succeed, expect Sterling to make further gains to 154.70 or even attempt 155.

A failure to consolidate todays gains would see the Pound drop to 153.90 and even 153.50 in extension.

Dips in the GBP/JPY have been met by enthusiastic buying. The JPY appears to be the victim of either a sluggish domestic economy continually fighting pandemic fires, or pushed around by the fluctuations of US Bond yields.

GBP/CHF

The Pound is trading below my pivotal price of 1.2740. Although it is not being sold off in an aggressive way, it’s drifting around. its immediate direction is unclear, unless the GBP/CHF trades at 1.2700, then I think it is increasing likely that it could drop to 1.2660.

The GBP needs to recover above 1.2740 to regain some upward momentum and challenge the recent highs of 1.2780.

Analysis Provided by Eight dragons Capital.

If you want to know more on how to trade Forex successfully contact support@8dragonstrade.com or go to the contact page on this website.

Published by Neil Callard

Forex Trader and Educator. 30 years trading experience, of which 20 years was market making in major currencies in large international financial institutions.

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