GBPUSD Trading Above Ichimoku Cloud – IDDA Strategy
Traders woke up to GBPUSD trading above the daily Ichimoku cloud on Thursday's Asian session. What could this mean for the future of the pair? To answer this, we need to take an IDDA approach before developing a GBPUSD trading strategy.
1- Fundamental Points
UK side: After the the U.K. Supreme Court ruling on Tuesday, we saw a ton of volatility across the GBP crosses. However at the end, it looks like hope for a “softer” Brexit got rejuvenated. That explains why Mr. British Pound has been trading higher against his major forex dancing partners.
US side: President Trump pulled the US out of the TPP (Trans Pacific Partnership) on Monday. The TPP is a trade agreement among twelve Pacific Rim countries, but does not include China. It was signed in February 2016 in New Zealand after seven year of talks.
At this point nobody really knows what will happen if the US really withdraws from the pact. However, the TPP is weakened beyond recognition by the withdrawal of its largest member.
While Japanese Prime Minister Shinzo Abe has reportedly said that that the TPP without the United States would be “meaningless,” Australia has said they'll go through with it even if the US isn't there. This could give the global "super-power key" to China, which in turn, could weaken the USD.
2- Technical Points
The GBP/USD pair opened above the daily Ichimoku cloud on Thursday’s Asian session, moving towards the 23% Fibonacci retracement level at 1.2760. Support is set at 1.2115.
The pair may be on its way to form a Double Bottom chart pattern, with neckline also set at 23% Fibonacci.
3- Market Sentiment
47% of traders are long in GBPUSD trading. Long positions are 5.7% lower than Tuesday and 7.1% below levels seen last week. Short positions are 17.3% higher than yesterday and 77.1% above levels seen last week. Open interest is 5.3% higher than yesterday and 30.9% above its monthly average. We use this market sentiment data as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the GBPUSD may continue higher. The trading crowd has flipped from net-long to net-short from yesterday and last week. The combination of current sentiment and recent changes gives a further bullish trading bias. Stay tuned for more on market sentiment for GBPUSD trading in our investing group.
GBPUSD Trading Strategy
Calculate your risk tolerance and use the levels mentioned below to create a strategy suitable for you. For further help, please visit our investing group.
Original article: http://investdiva.com/invest-guide?slug=gbpusd-trading-ichimoku-cloud-strategy
1- Fundamental Points
UK side: After the the U.K. Supreme Court ruling on Tuesday, we saw a ton of volatility across the GBP crosses. However at the end, it looks like hope for a “softer” Brexit got rejuvenated. That explains why Mr. British Pound has been trading higher against his major forex dancing partners.
US side: President Trump pulled the US out of the TPP (Trans Pacific Partnership) on Monday. The TPP is a trade agreement among twelve Pacific Rim countries, but does not include China. It was signed in February 2016 in New Zealand after seven year of talks.
At this point nobody really knows what will happen if the US really withdraws from the pact. However, the TPP is weakened beyond recognition by the withdrawal of its largest member.
While Japanese Prime Minister Shinzo Abe has reportedly said that that the TPP without the United States would be “meaningless,” Australia has said they'll go through with it even if the US isn't there. This could give the global "super-power key" to China, which in turn, could weaken the USD.
2- Technical Points
The GBP/USD pair opened above the daily Ichimoku cloud on Thursday’s Asian session, moving towards the 23% Fibonacci retracement level at 1.2760. Support is set at 1.2115.
The pair may be on its way to form a Double Bottom chart pattern, with neckline also set at 23% Fibonacci.
3- Market Sentiment
47% of traders are long in GBPUSD trading. Long positions are 5.7% lower than Tuesday and 7.1% below levels seen last week. Short positions are 17.3% higher than yesterday and 77.1% above levels seen last week. Open interest is 5.3% higher than yesterday and 30.9% above its monthly average. We use this market sentiment data as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the GBPUSD may continue higher. The trading crowd has flipped from net-long to net-short from yesterday and last week. The combination of current sentiment and recent changes gives a further bullish trading bias. Stay tuned for more on market sentiment for GBPUSD trading in our investing group.
GBPUSD Trading Strategy
Calculate your risk tolerance and use the levels mentioned below to create a strategy suitable for you. For further help, please visit our investing group.
Original article: http://investdiva.com/invest-guide?slug=gbpusd-trading-ichimoku-cloud-strategy