![I went long on the $GBPUSD at 1.6220 as the pair retraced to 1.6180 after its quick burst from 1.6137 to a high of 1.6244 on the back of UK Hometrak numbers released that showed a smaller-than-expected drop in home sales and steady home prices. This is a busy week out of the UK and the good housing numbers may just signal a positive week for the GBP. Major spotlight events this week for cable include BoE rate decision on Thursday and US non-farm payrolls on Friday.
Technically, the pair has been rallying since the pair was able to break and then stay above 1.5000 some weeks ago. I count 3 waves in any trend as taught by @allthingsforex and am counting our entrance into a 2nd bullish wave. We had a mild correction last week when price made a low of 1.5852 but never completed the quarter to 1.5750 — a bullish development. Now price is even beyond 1.6000 whole number completing the quarter to 1.6250. This morning’s retracement held at 61.8% retracement marked at 1.6178 by 2 pips and now as I write up this analysis, price is breaking out making a new high at 1.6290. Price is now above 1.6250 moving into the hesitation zone above the 1.6250 quarter point. The next area to watch is the halfway thru point at 1.6325. It will also be interesting to see what the pair does when NY opens in 5 hours.
I remain bulllish cable. 1.6500 is my ultimate target with my limit set at 1.6420. Not too far above that is 1.6672 the high back in October 2008.
UPDATE (9:56AM PDT): My limit was hit as the pair made highs during the European session. The highs of day were made [actually are still being made as I write] during the NY session as traders digested the positive news coming out the UK including the stronger-than-expected UK manufacturing PMI numbers. We also got releases out of the US that suggest that the US consumer is saving more than its spending — which is great but not for a US economy that is supported by consumer spending. ISM came in stronger-than-expected but $GM news is trumping any good news out that may have contributed to a USD rally. Cable has posted fresh highs at 1.6475 — close enough to completing the quarter at 1.6500.
UK news tomorrow includes construction PMI, mortgage approvals, M4 money supply, and consumer confidence. US news includes pending home sales and consumer confidence. Calculating the fibonacci levels of today’s move from 1.6137 to 1.6475, I find the 38.2% fibo retracement level is at 1.6345, 50% is at 1.6308, and 61.8% lies at 1.6266. Now I don’t think that price will retrace that much because of the fundamental landscape and the strong price action today. But it is necessary to note these levels.
If price breaks above and stays above 1.6500 after expected retracement, then the up trend remains intact and I plan on riding this wave as long as it lasts being mindful of the BoE on Thursday. They may put out a statement that could be considered dovish as they did last month. If so, then a long anticipated correction in the $GBPUSD may finally materialize.](http://24.media.tumblr.com/3sDD0fmwho6ec1tgkPbnP0pao1_500.png)
I went long on the $GBPUSD at 1.6220 as the pair retraced to 1.6180 after its quick burst from 1.6137 to a high of 1.6244 on the back of UK Hometrak numbers released that showed a smaller-than-expected drop in home sales and steady home prices. This is a busy week out of the UK and the good housing numbers may just signal a positive week for the GBP. Major spotlight events this week for cable include BoE rate decision on Thursday and US non-farm payrolls on Friday.
Technically, the pair has been rallying since the pair was able to break and then stay above 1.5000 some weeks ago. I count 3 waves in any trend as taught by @allthingsforex and am counting our entrance into a 2nd bullish wave. We had a mild correction last week when price made a low of 1.5852 but never completed the quarter to 1.5750 — a bullish development. Now price is even beyond 1.6000 whole number completing the quarter to 1.6250. This morning’s retracement held at 61.8% retracement marked at 1.6178 by 2 pips and now as I write up this analysis, price is breaking out making a new high at 1.6290. Price is now above 1.6250 moving into the hesitation zone above the 1.6250 quarter point. The next area to watch is the halfway thru point at 1.6325. It will also be interesting to see what the pair does when NY opens in 5 hours.
I remain bulllish cable. 1.6500 is my ultimate target with my limit set at 1.6420. Not too far above that is 1.6672 the high back in October 2008.
UPDATE (9:56AM PDT): My limit was hit as the pair made highs during the European session. The highs of day were made [actually are still being made as I write] during the NY session as traders digested the positive news coming out the UK including the stronger-than-expected UK manufacturing PMI numbers. We also got releases out of the US that suggest that the US consumer is saving more than its spending — which is great but not for a US economy that is supported by consumer spending. ISM came in stronger-than-expected but $GM news is trumping any good news out that may have contributed to a USD rally. Cable has posted fresh highs at 1.6475 — close enough to completing the quarter at 1.6500.
UK news tomorrow includes construction PMI, mortgage approvals, M4 money supply, and consumer confidence. US news includes pending home sales and consumer confidence. Calculating the fibonacci levels of today’s move from 1.6137 to 1.6475, I find the 38.2% fibo retracement level is at 1.6345, 50% is at 1.6308, and 61.8% lies at 1.6266. Now I don’t think that price will retrace that much because of the fundamental landscape and the strong price action today. But it is necessary to note these levels.
If price breaks above and stays above 1.6500 after expected retracement, then the up trend remains intact and I plan on riding this wave as long as it lasts being mindful of the BoE on Thursday. They may put out a statement that could be considered dovish as they did last month. If so, then a long anticipated correction in the $GBPUSD may finally materialize.
