A1 Trading

GBP/USD Deep Dive: Under Pressure?

December 1, 2021
Bart Kurek

Check out my previous G/U deep dive from early October here to see how we have progressed...

Technical Outlook:

Price has mainly been travelling in channels throughout the past year. As we saw the ascending channel formed post-Covid last year, price began retesting all previous key horizontal levels. Over the past couple of months, price has now formed a descending channel and likely making its way back down to lower key horizontal levels to continue the long-term trend.

We recently saw price create the next lower low in the channel, and we'll possibly look to continue this trend and price create the next lower high. However, if we see price struggle to break beyond 1.342 we could see a shift in trend and price potentially break out of the channel and head lower.

Retail Sentiment:

Unsurprisingly, data is showing most retail traders are actually long now, potentially looking to catch the move back towards potentially 1.37 the next touch of the channel's top. It's likely that we'll see financial institutions push price lower to take out most retail traders stop losses.

Upcoming News:

Unsurprisingly, we're not seeing a lot of high impact news events coming out as we approach Christmas however, all macroeconomic data does count towards an economy's outlook. Over the next couple of days, we're having the BoE Governor Bailey and MPC Saunders give a speech. With recent talks surrounding rate hiking and inflation, on top of the Omicron variant, it will be interesting what they have to say and their view on how this will affect the UK economy.

Fundamental Outlook:

The Bank of England Monetary Policy Committee member Catherine Mann argued that it was way too early to discuss the timing or size of rate hikes while reiterating that inflation expectations were still underway.

Looking at macroeconomic data, the UK Manufacturing PMI was finalised at 58.1 for November as against the estimate 58.2. Traders are now looking forward to the ADP report on private-sector employment and ISM Manufacturing PMI. G/U is expected to remain bearish unless the USD faces a heavy selloff.

The discovery of this new Covid variant and the potential outbreak is another headwind for the UK economy as a whole.

On the other hand, US Fed Chair Powell told the Senate Banking Committee that they will discuss speeding up asset tapering in the upcoming policy meeting and noted that it was time to stop describing inflation as "transitory". Commenting on the new coronavirus variant, Powell said that it could hurt the economic recovery but sounded more worried about its impact on the inflation outlook.

For any questions or comments, you can reach me at @TraderBart on Telegram or @TraderBart#2638 through the A1Trading discord.

The EdgeFinder

All-in-one Fundamental Dashboard

30 Days Access

Free Telegram

Join for daily analysis and trade setups!

Join Telegram

DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here

A1 Trading Company

A1 Trading is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
2024 All Rights Reserved | A1 Trading Company
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonecross-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram