Chart of the Day GBPUSD
GBPUSD Potential Reversal Zone - Probable Price Path
The market hopes that the European Union may reach a consensus on the 750 billion euro recovery fund, which dragged the U.S. dollar index down 0.4% to 95.9 last Friday, a 0.7% drop for the week, the biggest drop in seven weeks. However, due to the impasse during the negotiations of EU leaders, the US dollar index once rebounded 0.2% to 96.1 this morning. The yield on the 10-year U.S. Treasury bond fell nearly 2 basis points to 0.627% last week
The number of confirmed coronaviruses worldwide exceeded 14.4 million, and the death toll exceeded 600,000. In Hong Kong, the number of newly diagnosed patients exceeded 100 in a single day, setting a single-day high; Urumqi, Xinjiang implemented closed management of the community and provided free nucleic acid testing to control the epidemic. US President Trump will meet with Senate Majority Leader McConnell and Treasury Secretary Mnuchin and others to discuss a new round of economic stimulus plans. There are reports that Trump has increased virus detection and chasing $25 billion Grants reserved
Former Fed Chairman Bernanke and Yellen warned that the economic recovery of the United States after the epidemic may be slow and uneven, and the Fed has the opportunity to implement yield curve control. Twenty finance ministers and central bank governors held video conferences to consider extending the debt repayment period of the poorest countries due at the end of the year. IMF urges the United States to quickly implement a new round of fiscal stimulus
GBP: British Prime Minister Johnson asked cabinet members to return to work in the office this week and will not implement the national lockdown and prevention measures again; but chief scientific adviser Patrick Vallance said on Friday that there is no need to change the guidelines for staying home as much as possible and facing the winter epidemic Deteriorating again at any time, the nationwide epidemic prevention measures may need to be tightened
USD: The USD should remain driven by two key factors: (1) the role of the currency as the ultimate safe haven that should continue to benefit from any return of global risk aversion on the back of fears of a Covid-19 second wave or escalating geopolitical tensions; and (2) the USD could emerge as one of the victims from the growing political uncertainty ahead of the US presidential election and lose ground going into H220 against other liquid currencies like the
From a technical and trading perspective, GBPUSD is developing a potential bullish triangle continuation pattern above the pivotal 1.25 handle, bullish exposure should be rewarded on a closing breach of 1.26 initially targeting prior cycle highs above 1.28 en-route to an equality target of 1.2895. Only a closing breach of 1.25 would negate the bullish thesis suggesting a return to test 1.23 support.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!