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Forex Market Analysis: GBP and AUD Approaches Resistance Level. UK Rate and Inflation Report in Focu

Forex
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Friday, May 5, 2017/ 12:30 PM /Meristem


Source: MERI FX


Fundamental indication
:
GBP: The Gross Domestic Product (GDP) released on Friday, April 28, 2017 stood at 2.1%, a 0.1% decrease from the forecasted 2.2%. Market participants await the Bank of England Rate Decision and Inflation Report on May 11. These releases are important as they may influence the price movement of the pair. If these imminent economic report appear adverse, investor sentiment may become negative, triggering the currency to decline against most of its major counterparts due to the sequence of major negative economic news and vice versa.

AUD:
The Australian Dollar has displayed mixed sentiment following the Consumer Prices Index (2.1%) release on Wednesday, April 26, 2017 indicating a decrease of 0.1% from the forecasted 2.2% and the Reserve Bank of Australia Rate Decision on May 02, 2017 to maintain the rate at 1.50%.


Technical Analysis
:
The pair has been in a downtrend since 25th of August, 2015. It has however formed a floor and has been making higher highs and higher lows which indicates a change of trend. It also broke the 1.7122 resistance level on 26th of March, 2017.

Scenario 1
:
·        
If the pair reaches the 1.7732 resistance and displays a bearish candlestick confirmation, we advise a “SELL”

·        
Stop loss at the high of the bearish candlestick

·        
Price target at 1.7122

Scenario 2
:
·        
We advise a “BUY” only when the pair reaches 1.7732 and pulls back to the 1.7122 price. A bullish candlestick confirmation with rising momentum is required

·       
  Stop loss at the low of the bullish candlestick

·        
Price target at 1.7732
 

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