Today’s focus turns to GBP & US FOMC Meeting
Major pairs ready for correction, except for GBP. Another day, another round of weak UK data. It just hasn’t stopped giving!
It’s been a long while since we’ve had such a good run of consistent data. The US had some many months ago but it was nothing like the scale of ‘collapse’ almost of the UK economic data. Today we have another crack with UK Construction PMI & then again on Thursday with UK Services PMI. Heaven’s to Betsy, if they all come in weak we could be looking at potential rate cuts in the UK and GBPUSD to be trading much closer to 1.3000. But, and here’s the big BUT, we have the FOMC to navigate first. The strong US data point to a potential hike in June but I don’t really think we’ve seen anything to change the general game plan for FED Chairman Powell. So my thinking is if the FED does stick to the same mantra and doesn’t sway far from their Statement then we may, in fact, see the USD come back a bit. All of the major pairs look ready for an 80-100 point pullback at least. Except for GBPUSD which is only going to head one way if the UK data is weak, regardless of what the FED does. The good thing is we have clear sentiment at the moment so it gives us opportunities both sides of the market. But of course, the ‘Trend if your Friend’ so make sure, at the very least, you nail the moves running with the trend.
Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.
It’s Golden Week in Japan so there’s not a lot to get excited about. No major releases so I’ll be giving it a miss for today.
The Euro session at the moment is like going to a fun park, what with all the weak UK data. It’s on again today with the construction data due. If it comes in weak, then you should feel very comfortable to sell GBP. It’s just the way it is at the moment. There are a few other Eurozone numbers also and after the German retail sales data a few days ago moved the market, there’s no doubt this data can as well. Focus on the data, current momentum, and technical levels.
North American Session
It’s all about the Federal Reserve. The market isn’t expecting a rate change so it all comes down to the Statement.
When there’s no potential rate change the event can become convoluted and confusing, so don’t feel like you need to get in.
Stick to your technicals for entry levels as opposed trying to decipher the Statement yourself.
It’s always a big event regardless so strap yourself in!
Technical Set Up – What’s Happening with the Majors
Today’s Fundamental Drivers
Plan the Trade, Trade the Plan!
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