DERBYSHIRE GB / APR 20 - This is the GBP/USD trade plan which contains a go to market strategy.
UK Economic Growth weighs on sterling
Another hot CPI report this week puts pressure on the Bank of England to remain hawkish and continue raising rates until inflation is back under control. Higher rates will have the added effect of slowing down the economy and potentially causing a recession.
Banking crisis subsides, putting some strength back into the dollar
The CME FedWatch Tool indicated that markets had begun pricing in a Fed cut as soon as July which contributed to the dollar weakness. However, with the banking crisis contained and inflation still being far above target, the sentiment towards a so-called Fed pivot is probably going to be eased back.
Technical Evaluation
The GBP/USD is currently trading in the $1.24 area. The short-term (50-day) average is approaching $1.22, as is the medium-term (100-day). The long-term (200-day) average has broken above $1.19 and is rising.
Research suggests that the fundamental value of the GBP/USD is expected to stay above the $1.21 area and below $1.26 area.
GBP/USD Trade Plan
The GBP/USD trade plan is to sell from levels above 1.24 with stop loss above 1.26 and profits to be considered in the 1.23 area or below. Trade plan expires on April 27th at the latest which is when the US GDP data is released.
Gavin Pearson
Retail trader since 2008
Specialises in forex G7 currencies
Funded account from the5ers.com
Member of the eToro Popular Investors Program
Regular contributor to FXStreet.com analysis and education pages
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