GBPUSD: a good place to start a correction

2 Mei 2018

Despite yesterday's sell-offs in the GBPUSD pair, we are still not ready to turn over into sales, rather, on the contrary, the desire to buy only grows.
Oversold on the daily chart has reached just indecent sizes (daily RSI (8) = 15). Yesterday's closing of the day was below the Bollinger line. MACD moved to the extreme zones. That is, the whole set of technical signals, which we have already noted earlier, only intensified.

As for the fundamental background, it has not changed globally – markets are still disappointed by the "pigeon" rhetoric of the Bank of England (in fact, nothing radically terrible, as expected rate in 2018 will be raised) and, of course, BREXIT.

At the same time, the fundamental background and moods on the market may change already this evening, when the Fed will announce its decision on interest rates.

Note that a big role in the current decline of the pair was played by the dollar, which in April had one of the best months since Trump was elected as the President of the United States (the US dollar's main growth was due to a sharp increase in the yield of US Treasury bonds). Accordingly, any sale of the dollar - is an excellent opportunity for the growth of the GBPUSD pair. Correction in the dollar is ready to start, and today can give the necessary reason that it provokes. Following the FOMC, the Fed will most likely not raise rates, but this is not the main thing. The main thing is that it is possible to change the degree of rhetoric. That is, the Central Bank may announce a desire to review the pace of rate increase. For example, by lowering the estimated number of rate increases in 2018 or 2019. This, in turn, will provoke a sharp decline in the dollar.

Thus, we continue to recommend the purchase of the GBPUSD pair. The level 1.3600 seems to us a great point for this. Moreover, the risks can be quite rigidly limited by stops below 1.3450. At the same time, the goals for the position are more than noble - up to 1.4250.