Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Bank of England is predicted to hike interest rates by 25 basis points to 1.25% and keep the Asset Purchase Target at £875B. Forex traders can compare this to the previous Bank of England meeting, where the UK central bank raised interest rates by 25 basis points to 1.00% and kept the Asset Purchase Target at £875B. Traders should monitor the press release following the announcement for clues about potential changes to monetary policy and the inflation outlook. Given the slowdown in the UK economy, a surprise 50 basis point hike is unlikely, but the British central bank warned of stagflationary conditions during its previous meeting in May. A reduction in QE should not surprise traders, but it is unexpected.
US Housing Starts for May are predicted at 1,701K starts, and Building Permits at 1,785K permits. Forex traders can compare this to US Housing Starts for April, reported at 1,724K starts, and Building Permits at 1,823K permits.
US Initial Jobless Claims for the week of June 11th are predicted at 215K, and US Continuing Claims for the week of June 4th are predicted at 1,302K. Forex traders can compare this to US Initial Jobless Claims for the week of June 4th, reported at 229K, and US Continuing Claims for the week of May 28th, reported at 1,306K.
The Philadelphia Fed Manufacturing Index for June is predicted at 5.5. Forex traders can compare this to the Philadelphia Fed Manufacturing Index for May, reported at 2.6. Traders should focus on the CAPEX, Prices Paid, New Orders, and Employment sub-components.
US Natural Gas Inventories for the week ending June 10th are predicted at 96B cubic feet. Traders can compare this to US Natural Gas Inventories for the week ending June 3rd, reported at 97B cubic feet.
The forecast for the GBP/USD remains bullish after this currency pair reversed off its horizontal support area. After the Ichimoku Kinko Hyo Cloud turned sideways, bearish pressures eased. It is confirmed by the flat Kijun-sen and Tenkan-sen. Traders should expect a rise in volatility as bulls and bears fight for control over the next move. The CCI could provide the next catalysts if this technical indicator completes a breakout from extreme oversold territory. Can bulls regain the upper hand and guide the GBP/USD into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the GBP/USD remain inside the or breakout above the 1.2030 to 1.2200 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.2135
- Take Profit Zone: 1.2570 – 1.2665
- Stop Loss Level: 1.1915
Should price action for the GBP/USD breakdown below 1.2030, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1915
- Take Profit Zone: 1.1775 – 1.1880
- Stop Loss Level: 1.2030
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