Capitalising on a Weakening Pound: Two Trading Approaches
The pound weakened across the board on Friday after unexpectedly tepid retail sales numbers showed signs of stagnation in the UK economy.
Retail sales remained unchanged between February and March, following a revised 0.1% increase in the previous month, falling short of economists' more optimistic forecast of a 0.3% expansion.
Let’s delve into two GBP currency pairs showing momentum in the wake of the pound's decline.
GBP/USD:
GBP/USD has been forming a bearish pattern of lower swing highs on the daily candle chart since March. Downward momentum intensified after breaching key support on April 12th, and following a period of tight consolidation, GBP/USD resumed its downtrend on Friday.
Both trend and momentum are currently bearish across daily and hourly candle charts. Traders who typically monitor trend continuation might look at pullbacks or consolidations to inform their strategies.
GBP/USD Daily Candle Chart
Past performance is not a reliable indicator of future results.
GBP/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results.
EUR/GBP:
Despite typically exhibiting less volatility than GBP/USD due to geographical proximity and deeper trade ties, EUR/GBP had a decisive break higher during Friday’s price action. This development suggests a potential retest of the New Year swing highs.
A closer look at the hourly candle chart highlights EUR/GBP’s bullish short-term momentum. Traders looking for trade continuation opportunities may consider buying pullbacks on the hourly timeframe.
EUR/GBP Daily Candle Chart
Past performance is not a reliable indicator of future results
EUR/GBP Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Retail sales remained unchanged between February and March, following a revised 0.1% increase in the previous month, falling short of economists' more optimistic forecast of a 0.3% expansion.
Let’s delve into two GBP currency pairs showing momentum in the wake of the pound's decline.
GBP/USD:
GBP/USD has been forming a bearish pattern of lower swing highs on the daily candle chart since March. Downward momentum intensified after breaching key support on April 12th, and following a period of tight consolidation, GBP/USD resumed its downtrend on Friday.
Both trend and momentum are currently bearish across daily and hourly candle charts. Traders who typically monitor trend continuation might look at pullbacks or consolidations to inform their strategies.
GBP/USD Daily Candle Chart
GBP/USD Hourly Candle Chart
EUR/GBP:
Despite typically exhibiting less volatility than GBP/USD due to geographical proximity and deeper trade ties, EUR/GBP had a decisive break higher during Friday’s price action. This development suggests a potential retest of the New Year swing highs.
A closer look at the hourly candle chart highlights EUR/GBP’s bullish short-term momentum. Traders looking for trade continuation opportunities may consider buying pullbacks on the hourly timeframe.
EUR/GBP Daily Candle Chart
EUR/GBP Hourly Candle Chart
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.