GBP USD Technical Analysis | GBP USD Trading: 2018-10-05 | IFCM
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GBP USD Technical Analysis - GBP USD Trading: 2018-10-05

Weaker UK data bearish for GBPUSD

UK construction and services sectors’ expansion slowed more than expected in September. Will the GBPUSD slide continue?

Recent UK data were weak: services sector expansion slowed more than expected as evidenced by decline of Markit’s Services PMI to 53.9 in September from 54.3 when a reading of 54 was forecast. Construction sector expansion slowing was more rapid than expected as Construction PMI fell from 52.9 to 52.1 when a reading of 52.5 was expected. Another weak datapoint was the reduction in new car sales in September by 20.5% over the same period a year ago. Weaker UK data are bearish for GBPUSD.

GBPUSD tests MA(50) 10/05/2018 Technical Analysis IFC Markets chart

On the daily timeframe GBPUSD: D1 is retreating after retracing to 3-month high two weeks ago. It is testing the 50-day average MA(50).

We believe the bearish momentum will continue after the price breaches below the lower Donchian boundary at 1.2921. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the last fractal high at 1.3297. After placing the pending order the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.3297) without reaching the order (1.2921) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

PositionSell
Sell Stop Below 1.2921
Stop loss Above 1.3297

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This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

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