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GBP/USD Fundamental Analysis: June 11, 2018


The pound/dollar pair continued to trade around the 1.3430 region on the back of the failure to create bullish momentum in the previous week, as it was beaten by the major handle and the markets are waiting for further progress in Brexit this week. Due to the scheduled FOMC rate hike in the upcoming week, the interest rate differential of the GBP and the USD is predicted to move in different directions which could hold the Pound on its starting position and push the British currency into the recent lows. Following the recently rejected  Irish border solution, market participants await for further news within this week while the United Kingdom continue to negotiate in looking for the middle ground for the hard-line Brexiteers and the EU leadership in Brussels. Nevertheless, Prime Minister Theresa May was caught in between and trying to find fair solutions for both sides.


The upcoming week is projected to be really busy for the Sterling pound since 4 out of 5 trading session this week brought extreme impact to the UK calendar that could support a high level of volatility for market players. Today has plenty of data for Britain which will be all published at 08:30 GMT, however, the focus will be on the  Manufacturing Industrial Production data which is expected to remain unchanged at 2.9%. The US session today appears to be in smooth sailing according to the economic calendar, but traders might deal with the G7 summit blowout, wherein US President Donald Trump leave the summit earlier and depart the US’ support of the G7 communiqué, following a Tweet from POTUS aboard Air Force One heads to Singapore for the Trump-Kim summit.


At the same time, the figures for Average Earnings Index +Bonus (Apr), Claimant Count Change (May), Core CPI & PPI input and Core retail sales in the next three consecutive trading sessions. Moreover, the daily chart indicates that the GBP/USD currency pair corrected higher from the lows of 1.3205 alongside the diverging technical oscillators. On the other hand, the Relative Strength Index (RSI) had an unexpected move towards the oversold area and bounced back to the GBP, which descends to the levels of the beginning of last week. The Slow Stochastic resumed moving in an upward trajectory. The daily chart of the 50-day and 100-day moving average formed a death star crossover, this means that there is an initial downside potential of the Cable pair to break the 1.3300 region prior attacking the area of 1.3200. The upside of the pair is necessary to break back above the 1.3380 to the 1.3450 target, which is the last week’s high.


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GBP/USD Technical Analysis: June 18, 2018


The British pound was able to dodge the immediate impact of the rise of the dollar while the euro dropped by two significant points that dominate the market in the previous week. The dollar gained from the rate hike which started by the Fed and the positive outlook of the Fed in the economy.


The hawkish sentiments gave t chance to the dollar to rise and the dollar bulls to plan ahead with two more rate hikes to look forward to. The Fed gives similar signals which still yet to be seen if they would continue the process and they would implement this in a specific period of time later on. We have witnessed that the rate hike would have minimal impact on the market, especially on the pound.


It seems that everything is going smoothly in the UK as the Brexit negotiation starts to advance and there are no signs of risks yet. Hence, the pound maintained its position in the support area despite the strengthening of the dollar and activities in the eurozone. The European Central Bank decided to extend the easing program which in turn, weakened the euro. Although, these things did not really affect the pound as it continues to trade close to the area of 1.32.


There are some strong purchasing in this area, as well as at the level of 1.30. Once this is achieved, the lead will be in the hands of the bulls which is likely to be maintained in short term. It seems that there is also no major event to affect the movements and we can say that the price is in consolidation and persists to be within the range for the day.


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USD/JPY Technical Analysis: June 21, 2018


The USD/JPY pair closed higher inside day during the Wednesday session, reflecting uncertainty and expected volatility with a tendency to move up.


The Forex pair also underwent a transition period after the momentum changed to a downturn at the beginning of the week. However, even if the momentum changed, the main uptrend remains solid.


On the other side, there was a short-rally to cover after sellers moved below after a sharp sell-off on Tuesday.


The Japanese yen major pair moved higher on early Thursday with a strong compulsion in purchases from the Wednesday and Thursday highs. Hence, this northward sentiment induces the market to move their positions in the attempt to test the psychological level of 110.859 and the main top at 110.905.


Higher demand for risky assets drove the price action of the pair and losing the Japanese Yen as a safe-haven. On a deeper perspective, the tension on trade war between the U.S. and China is the main impetus of the trend.


The pair is being traded 110.559 and increased by +0.19% or 0.215 at 2.04GMT. It is likely to uphold its positions taking into account rising of stocks and unsettled trade war between the two big nations continues to advance peacefully.


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