Saturday, February 15, 2014

GBP-USD Technical Analysis for Next Week (15 Feb 2014)

MACD Settings:- First EMA = 12 | Second EMA = 26 | Signal EMA = 9
Stochastic Settings:- Period = 5 | Average Period Fast = 7 | Average Period Full =7
Bollinger Bands Settings:- Average = 20 | Standard Deviation = 2
Date: 15 Feb 2014
Time: 4:44 PM (+8 GMT)

GBP-USD
Technical.Indicators 4 Hourly Daily Weekly Monthly
MACD Up Up Up Up
Full Stochastic Up Up Down Up
Bollinger Bands N/A N/A N/A N/A
Chart Formation N/A N/A N/A N/A
Market Direction Up Up Up Up
Market Comments This is an obvious bullish for the Cable (GBP-USD) as you can see short-term to long-term indicators all showing upside except in the intermediate terms (weekly time frame) where there is contra direction between the MACD and Stochastic. In this case MACD most likely the winner and that will support further upsides.

The previous week 10 to 14 Feb 2014. The upside movement is the result of consistent economic data for the pound sterling. While on the other hands there is slight weakness in the dollars economic data.

Based on the economic calenders Forex Factory the GBP economic data still dominated the first 3 days of the week (Monday, Tuesday, Wednesday) and if there are all positives it could trigger another breakout to target the highest resistance at 1.69989.

Despite of the convincing direction of the technical indicators there are risks that we need to consider that could take the direction to reversal where correction is the most likely to first to take charge.

1. Sentiment indicators - This can be view by the open position ratios from various broker such as OANDA, DukasCopy, SaxoBank, Alpari, etc refer to Open Position Indicators. Based on the consensus from all brokers the crowds seems to prefer bearish at this time and as you can see at least 80% - 90% open position are selling.

2. The chart (Monthly time frame) is already reaching the most ideal position and correction is waiting to make ways at any moment of negative economic data.

3. What if the first 3 days of next week GBP data are weaker compare to the USD correction could make a massive free falls.

5 comments:

Ayatollah Rock said...

The unexpected natural disaster effects from the massive floods across the UK could bring down the GBP-USD as this will definitely costs the british government billion of dollars and temporary loss in jobs.

http://www.bbc.co.uk/news/uk-26183403

Will the big speculators bound to this effect for Bank of England (BOE) will definitely yes. We will see the rest of the big players next week what will they do.

Ayatollah Rock said...

Sunday Feb 16 2014 (5 PM +8 GMT)
--------------------------------
Reference: http://www.bbc.co.uk/news/business-26216141

Bank of England governor talking about the recovery of housing market and he specifically said

"there was little the bank could do to cool the London market, where prices were rising far faster."

"Prices in London are rising by about 10% a year, but Mr Carney said a change in interest rate policy - not on the cards in any case until the recovery is well established"

Ayatollah Rock said...

What's the overall verdicts based on this assumption:

1. Bank of England (BOE) governor Mark Carney says housing market is rising faster but rate hike is not on the card - strengthen GBP

2. UK Flood disaster - weaken GBP

3. Open position ratio all shows 80%-90% sells position across brokers (OANDA, Alpari, Saxo Bank) - weaken GBP

4. Dollar Index hitting last support - Chances to rebound back next 2 weeks. - Strengthen USD

Based on the above info - there is strong chances the GBP-USD is going for correction somewhere within next week.

Ayatollah Rock said...

The GBP-USD fall on Monday 17 Feb 2014 based on the previous comment verdicts

Ayatollah Rock said...

1.6762 support - reached hourly time frame
1.6666 support - reached 4 hourly time frame