Broadening Wedge Trading Idea as GBP/Usd pair made a good buy as speculated in our previous analysis thus testing and bouncing off the resistance of the broadening wedge pattern.
Will the pair continue selling or pull back to retest the broken support level? Read through to find out more…
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Economic Events On GBP
This typically measures the changes in the price of goods and services purchased by consumers over some months, It is considered to be the United Kingdom’s (UK’s) most important inflation data because it is basically used as the central bank’s inflation target.
The average price of varieties of goods and services are mostly sampled and then compared to the sampling done a year earlier to examine the changes.
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because the rise in prices of goods and services leads the central bank to raise interest rates out of respect for their inflation containment mandate.
This information is released monthly, about 16 days after the month ends and if the ‘Actual’ result is greater than ‘Forecast’ then is good for the currency.
Due to testify, along with BOE Deputy Governor Jon Cunliffe, on the Bank of England Financial Stability Report before the Treasury Select Committee in London,
The Bank Of England Governor (BOE) Mar 2020 – Mar 2028. Volatility is highly experienced during his speeches as investors/Traders attempt to decipher interest rate clues which is a significant insight into the economy.
Being head of the central bank, who controls short-term interest rates, however, has more influence and makes more impact on the nation’s currency value than any other person.
Investors/Traders scrutinize his public engagements as they are often used to drop relevant clues regarding the future monetary policy of the nation.
BOE Governor Andrew Bailey’s hearings, when More hawkish than expected are good for the currency.
Trading Idea Gbp/Usd
Economic Events On Usd
This basically measures the number of individuals who filed for unemployment insurance for the first time during the previous week, This is typically one of the nation’s earliest economic data events. The market impact however fluctuates from week to week as a result of that.
There tends to be more focus on the release when investors/traders need to diagnose, study recent developments, or when the reading is at its peak, Although it’s generally conceived as a lagging indicator by Investors/Traders, the number of unemployed people happens to be an important index of overall economic health because consumer’s spending is highly correlated with labor-market conditions.
Unemployment is also a major consideration for those controlling the country’s monetary policy, it’s often released weekly, usually on the first Thursday after the weekends, if the ‘Actual’ data release is less than ‘Forecast’ then is good for the currency.
This measure annualized a unique number of residential housing that was sold during the past month, excluding newly constructed ones. While this is monthly data, it’s reported in an annualized format (monthly figure x12) and is also a leading indicator of economic health because the sale of a home stirs up a wide-reaching ripple effect.
Renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid exclusively to execute the transactions, Data is released monthly, about 20 days after the month ends. when the ‘Actual’ outcome is greater than the ‘Forecast’ then is good for the currency.
Trading Idea Gbp/Usd
From our previous analysis, we speculated on the direction of the above chart pattern known as Descending broadening wedge which played out well, Broadening Wedge Trading Idea on Gbp/Usd pair formation is a price chart pattern identified by technical analysts.
It is characterized by increasing price volatility and diagrammed as two diverging trend lines, one rising and one falling.
It usually occurs after a significant rise, or fall, in the action of security or commodities prices. Moreover at the end of Q4 pair traded around the support of the chart pattern which later rallied up as a result of bullish economic data release
GBP/Usd pair has tested and bounced off the resistance of the descending broadening wedge pattern at a high momentum, It is also expected that the pair may pull back to retest the broken support level 1.36500 or 1.37000 before it continues its bearish extension
Great Britain pounds Vs Us Dollars Gbp/Usd may sell tremendously as per the upcoming economic events which is a leading index on a nation’s currency value,
However, utilizing the stochastic oscillator whose SMA’s is heading off overbought level signals that buyers are exhausted therefore closing their long position and that sellers are setting in with their massive short(sell) orders.
What are your thoughts on this Gbp/Usd trading idea? Is it useful? or is it a waste of time? Let us know by commenting on this post or our forum, and be sure to check back in the near future for more trading-related content.
“Chikwem Chinedu Ogugua is a Trader | Content writer | Entrepreneur| With a passion for educating others about the financial markets. Through his writing, he works tirelessly to share insights and knowledge gained from years of experience trading in the financial market. He is dedicated to helping others achieve success in their journey by providing valuable information on what works and what doesn’t.