GBPUSD: Forex Technical Analysis – UK growth upgrade bullish for Pound

By IFCMarkets

UK growth upgrade bullish for Pound

2018 GDP upgrade is bullish for Pound. Will the GBPUSD continue rising?

The UK economy 2018 growth forecast was upgraded Tuesday. The Office for Budget Responsibility’s forecast for the UK GDP was revised to 1.5% in 2018 compared with a 1.4% estimate released in November. Growth forecasts of 1.3% for 2019 and 2020 were unchanged. Stronger growth is bullish for Pound.

On the daily chart the GBPUSD: D1 has been retracing following the rise to 19-month high in the end of January.

• The Parabolic indicator gives a buy signal.
• The Donchian channel signals uptrend, it is tilted up.
• The MACD indicator is above the signal line and the gap is narrowing, which is a bearish signal.
• The stochastic oscillator is falling but hasn’t reached the oversold zone.

We believe the bullish movement will continue after the price breaches above the upper Donchian boundary at 1.3995. A price above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 1.3780. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.3780) without reaching the order (1.3763) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Position	Buy
Buy stop	Above 1.3995
Stop loss	Below 1.3780

Market Analysis provided by IFCMarkets