ad
Forex Brokers Award 2020
Vote your favourite broker
Trade 100 Bonus - the best offer on Forex market

GBPUSD Flirts With Its Support and Resistance at 1.22869

Oct 2 2019, 09:57 PM (BDT) | OlympTrade.com

 

We mentioned yesterday, there was a release from the United States on ISM Manufacturing PMI for September. It was a bad disappointment with the lowest reading in over ten years. The ISM reading came in at 47.8 for the month of September, missing the forecast of 50.4. Any reading below 50, points toward a contraction in the economy.  

The United States and China continue to heavily weigh on trade worldwide. The United States GDP has been decreasing over the year. Last September 2018 the GDP was reported at 4.2% vs the 2% released last week. Traders and investors are now waiting for the resumed negotiations between the two sides starting from October 7th, once the celebration of the 70th anniversary of China passes.   

An additional blow came today with the release of US ADP Nonfarm Employment Change. The employment numbers were reported at 135K below the forecast of 140K and well below the previous fact of 157K, which was also revised down from 195K. This paints a bad picture for the US labor market. 

This is a sneak peak before Friday’s, more comprehensive release on non-farm payrolls, which will include both public and private sector employment.

In reply to an increase in global uncertainty major US Indices like the Dow Jones, NASDAQ and S&P 500 have been on a decline for 2 days. 

While the US Dollar is under new pressure, Prime Minister Boris Johnson won’t let GBPUSD rise by much with his speech at the Conservative Party’s conference. PM Johnson has again stressed the importance of getting on with Brexit that they have promised the British citizens since 2016. 

Johnson is to put forward a new outlined plan for the Northern Ireland backstop in Brussels on Wednesday, while no one has yet seen the details of the plan, it’s safe to say that all sides remain skeptical. 

One thing was made clear by Johnson, with renew passion, that he will never agree to delaying Brexit beyond October 31st. 

As a result, GBP USD has been riding a volatile rollercoaster. On a 4HTF we saw a slight rise above resistance following upbeat UK Manufacturing PMI, followed by a dip down, also following upbeat Manufacturing PMI from the US, only to be slapped back up 15 minutes later with depressing US ISM PMI. The following day PM Johnson brought the Pound lower again with his demands that the EU back down and compromise on a new deal for Brexit arrangements, but ADP and Crude Oil Inventories are bringing the US Dollar even lower, fighting to break above resistance at 1.22869. 

Tomorrow, October 3rd, we have PMI releases from both the UK and the US. There are also employment figures from the US. On top of that, we have to tune our ears to new Brexit updates.    

Considering the situation, we would like to provide signals for both Bulls and Bears. 

Currently, the asset is experiencing Bull power with another attempt to break above resistance at 1.22869, which coincides with the Ichimoku Baseline. This follows a double failed attempt to break the support around 1.22275.  Once we have a close above this level of resistance, long positions may be considered with target areas at 1.23440 (38.2% Fibo) after that we have noteworthy resistance at 1.23776. 

If there are further negative developments with Brexit that overpower current Dollar weakness, targets to the downside will be at 1.22703 (50% Fibo), followed by support at 1.22275 and then 1.21967 (61.8% Fibo). 

 

OlympTrade.com

Olymp Trade is a reliable broker, a member of the Financial Commission of A category. This is proof of the high quality of our services and guarantees each trader deposit insurance, comprehensive support and prompt resolution of all issues.
ad