GBPUSD – SELL – 30th July 2020

GBPUSD – SELL – 30th July 2020 (Closed)

Good afternoon team,

Looking across the board the EURUSD appears to have run out of steam. The GBPUSD is looking very similar and trading between a very sharp ascending wedge formation. The pair is currently breaking to the downside of the wedge.

What we need to know fundamentally:

The USD has remained under pressure as the FED flooded the market with liquidity to help prop the US financial markets up. The demand for the USD has remained low as economic data points have recovered to some extent in other parts of the world. Therefore we have seen an increased supply and decreased demand of USD.

However, during recessions the USD will be in high demand as the safe haven appeal comes into play. Tonight we will see the US report is Annualised GDP data, forecast at -34.1%. Some analysts are forecasting the result to come in as low as -50%. The US is also reporting the next round of initial jobless claims which saw an unexpected jump last week. The FED has suggested the ongoing corona-virus is beginning to take its toll on the US market. Consumers are not spending and employers are not hiring. Therefore we may see some flows back into the USD over the short term.

GBPUSD – 1 Hour Charts

A break below the wedge could see the pair fall towards the 78% level with the 61% as an extension target. The 78% is also inline with the high previously in June. Therefore we could see a retest of the new support level. This provides roughly 100 pips for the first target.

Trade Setup: SELL – Market Execution, current price 1.2960, stop loss 1.3045 and take profit 1.2850-1.2730.

Stop loss: 85 pips

Take profit: 110-230

Trade Setup
SELL - Market Execution

Entry
1.2960

Take Profit
1.2850 - 1.2730

Stop Loss
1.3045