GBP/USD Weekly Analysis 08 March 2017

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During the Asian session, we had some interesting reports. The Japanese economic growth report showed a lower than expected growth in GDP of 0.3%, while expectation was for 0.4%, on a yearly basis, the actual pace was 1.2%, while expectation was for 1.6%.

The Chinese trade balance report revealed negative percentage (debit) for first time since March 2014. Specifically, the actual trade balance was at -9.15B, while it was expectation was for 25.75B. The reason was the fierce increase of imports of 38.1%, whilst the exports have marginally fallen by -1.3%.

Later today we are expecting the publication of ADP non-farm employment change, which is a measure that usually determines the Non-Farm payrolls.

 

CHARTING

The crucial points are:

1

The price of GBP/USD has continued falling in the previous sessions. Today, the price is strongly testing to break lower than 1.21600 level, where it seems to have found a support level. This falling is coming from US Dollar strengthening, due to high possibility of an interest rate hike from Fed in the upcoming FOMC meeting.

Charting outcome: Marginally bearish – Neutral   

INDICATORS (computerized T.A)                                                                  

The crucial points are:

2

3

The indicators are signaling that a downtrend has occurred, which is possible to become stronger. The moving averages have added slight bearishness to their slopes, while the spread between the negative and the positive dynamic has widened. The trend dynamic has fiercely risen by +79.71%, whilst the market’s volatility has marginally fallen by -9.43%. Finally, the oscillators have passed into heavily oversold territories.

Indicators outcome: Bearish – Marginally bearish         

CONCLUSION

Indicators and charting are in favor of the negative outlook. However, there are arguments arising from charting, which suggests the neutral outlook as well. If the price breaks lower than 1.21600 level of support, the next support is possible to be the 1.20000 level. On the contrary, if the price appreciates higher than 1.24000 level of support, the next resistance could occur at 1.25700 level.

 

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