GBPUSD from a technical viewpoint looks poised for a significant rally and looked at in isolation there seems to be a clear LONG trade opportunity. Yesterdays daily candle was a doji reversal candle at the end of a 9 day down move and the Traders Dynamic Index (TDI) on H4 has seen the market base line gradually moving north from sub 31 to 33.4. The RSI has already crossed the signal line.
However technical considerations are meaningless on NFP Friday and the promise of a rate hike next Wednesday.
With the chance of a USD rate hike running at as close to 100% as possible, its interesting to see the USD has not significantly strengthened against all currencies in fact EURUSD at 1.0610 is trading higher than its week open.
So how do we trade the NFP numbers and possibly more important the Average Hourly Earnings print?
I believe market reaction may be mixed unless we get a stellar jobs number and a better than expected A.H.E. and I'm expecting a USD spike up but this may present a selling opportunity of the USD or a buying opportunity for GBP.
A sustained move below 1.2133 will open the door for a deeper move lower but if after NFP Friday 1.2133 is intact then look to buy this pair.
However technical considerations are meaningless on NFP Friday and the promise of a rate hike next Wednesday.
With the chance of a USD rate hike running at as close to 100% as possible, its interesting to see the USD has not significantly strengthened against all currencies in fact EURUSD at 1.0610 is trading higher than its week open.
So how do we trade the NFP numbers and possibly more important the Average Hourly Earnings print?
I believe market reaction may be mixed unless we get a stellar jobs number and a better than expected A.H.E. and I'm expecting a USD spike up but this may present a selling opportunity of the USD or a buying opportunity for GBP.
A sustained move below 1.2133 will open the door for a deeper move lower but if after NFP Friday 1.2133 is intact then look to buy this pair.
