We are writing this update as the NZD number has been release. The deviation allows a short trade for about 40 Pips tha we may however control before the USD news on this thursday.
Right now, we still focus on GBPUSD news on this Thursday. We should expect from now on a GBP drop. However, we must be cautious for the FOCM rates and speech triggered off another huge GBP rise and the GBPUSD pair is now “ranging”. The number we are awaiting is the following one:
|08:30||GBP Retail Sales (MoM) (MAY)||Low||-0.2%||1.2%|
The deviation between the Previous and Forecast number is wide enough to expect another drop before the news. Here is the USDGBP situation at 1.15 am (Paris time):
As we can see, the bullish power is still present and we should wait for the followings to enter a short trade :
-price has dropped under the doji’s tails;
-or a significant candle has appeared.
So far, the best entry point is at the 1.58167 level. The Take Profit from this point would be at the 1.57826, and for the most ambitious traders, a second objective would be at the 1.57598 level. Price may drop deeper, but past the indicated levels uncertainty takes over.
Candlesticks crash course: the Dark Cloud Cover
This Wednesday, it was possible to make money on Brent. Indeed, a Dark Cloud Cover appeared on a 1h time frame:
The red horizontal line marks the high of the Shooting Star candle. The following white one forms an Engulfing pattern.You can see what followed:
As you can see it was possible to cash in with this trade. The drop was reinforced by the Crude Oil Inventory news at 4.30pm (Paris time).
Conclusion: focus on GBPUSD and then on USDCAD for the two following news. Beware on strong volatility on Friday.
Next update will be on sunday evening after the market’s opening.