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FREE FOREX TRADING SIGNALS: GBP/USD

TCI Forex Signals: GBP/USD

We are going to investigate the Forex pair GBP/USD which is currently trading in an uptrend channel. What is interesting about GBP/USD is not the uptrend itself. What is interesting is the probability that GBP/USD will provide high fluctuations, within or outside this channel.

TCI Signal on GBP/USD

MARKET CURRENCY ASSET TARGET  CRUCIAL DATES  (PEAKS) STOP LOSS

GBP/USD

1.5473

(4/26/2013)

1.5830

1.6300

+2 days or the 30th of April 2013

+8 days or the 8th of May 2013

+12 days or the 14th of May 2013

Stop-Loss:

1.5190-1.5215


First let’s evaluate the results of our previous TCI signal on the price of gold.

Evaluating the Previous TCI Signal on Gold

In our previous TCI signal we had forecasted a bull market rally in the price of Gold. We defined two major target prices (1,419 and 1,459 per ounce). Until today, the 28th of April, both targets were met. Gold moved smoothly upwards with straight corrections to major resistance levels. Probably every bullish day-trader did enjoy it. The best thing is to trade a market technically oversold and fundamental stable, and that is what happened to gold.

»Here is our latest TCI signal -On the price of gold

GBP/USD Technical Analysis

The following chart refers to the GBP/USD Forex pair, for the period starting in the 31 of May 2010 and ending in the 26th of May 2013. In the lower level of the chart there is a TCI chart on GBP/USD during the same period.

free forex trading signals

MT4 Chart Explanation

Since January 2013 the GBP/USD has entered an upward trend that forms the channel A//B in the chart. The points indicated as (1), (2), (3) are some important resistance levels discussed below. Finally, in the above MT4 chart we have included a Fibonachi Retracement.

Simple TCI Indicator Chart analysis

If we take a look at TCI indications at the lower part of the chart, during the same period (31 May 2010 until 26 May 2013), we can conclude that most of the times TCI peaked above +5.0%. In that sense, the overbought levels of TCI are above +5.0%. Today TCI on GBP/USD is about 3.1% as you can see in the above chart and also at the TCI data table presented in the end of this free signal. Given TCI indications we could conclude that GBP/USD is not yet overbought. That means that we could see an expansion of the upward TCI trend of about 2.0%. Therefore and according to TCI analysis GBP/USD may move to 1.5780-15810.

Resistance / Support and Periodic Peaks

GBP/USD at 1.5432 today is continuing an uptrend movement, but we shouldn’t expect that this movement will go one-way. There is a clear channel which is formed between the two Trendlines (A,B) and probably GBP/USD is expected to remain within that channel.

Crucial dates that we could see peaks and after corrections are:

a) +2days or the 30th of April 2013

b) +8days or the 8th of May 2013

c) +12days or the 14th of May 2013

Resistance and Support Levels

Here are some important resistance & support levels: 

6) 1.6600 (very strong)

5) 1.6300-1.6330 (very strong)

4) 1.6170 (strong)

3) 1.5980 (average)

2) 1.5830-1.5880 (average+)

1) 1.5595 (weak)

-Resistance Levels

GBPUSD 1.5473 (26th April 2013)

-Support Levels

1) 1.5390-1.5420 (strong)

3) 1.5340

4) 1.5270

5) 1.5190-1.5215 (strong)

Three Scenarios for GBP/USD

(a) If GBP/USD remains in the pre-mentioned channel A//B, then we should expect a soft upward trend with intraday corrections. (BASIC SCENARIO)

(b) If GBP/USD brakes the channel A//B Upwards, then a very fast move will bring GBP/USD even to 1.6300.

(c) If GBP/USD brakes the channel A//B Downwards, then it should probably try the previous low (1.5215).

Our Trading Tip: The upper and the lower points in the A//B formation will provide the perfect stop-loss points for short-term traders.


GBP/USD from a Fundamental Point of View -British Economy Vs US Economy

Here is a comparison between the two economies (British and the US)

Table: Compare the fundamentals of GBP and USD

COMPARE ECONOMIES

GBP

USD

GDP

 

LAST

LAST

GDP (USD Million)

Yearly

2,431,590

15,094,000

GDP (Year-to-Year)

Yearly

0.60%

1.80%

POPULATION

Yearly

62,640,000

311,590,000

GDP PER CAPITA PPP (USD)

Yearly

35,510

48,442

LABOUR & PRICES

 

 

 

UNEMPLOYMENT RATE

Monthly

7.90%

7.70%

INFLATION RATE

Monthly

2.80%

2.00%

MONEY

 

 

 

INTEREST RATE

Monthly

0.50%

0.25%

FOREIGN RESERVES (USD Million)

Monthly

104,749

151,895

GOVERNMENT

 

 

 

GOVERNMENT DEBT TO GDP

Yearly

90.70%

101.60%

GOVERNMENT BOND 10Y

Monthly

1.69%

1.85%

GOVERNMENT BUDGET

Yearly

-6,30%

-7.00%

Data Source: IMF, TradingEconomics

The British and the US economies are traditionally moving into a similar economic cycle. UK economic cycle is closer to the US economic cycle than to the Eurozone economic cycle. In terms of GDP change, the US economy is stronger (growth 1.8%) but of course given the fact that the US has imposed a much more expansive money policy in the US economy after 2008, than Great Britain did. Despite the higher money measures and the lower interest rates (0.25%), inflation is lower in the US (2.0%) and that means that FED is doing a nice job. The unemployment rate is almost the same in both economies (7.9% in the UK and 7.7% in the US). As concerns government debt per GDP the British economy is currently in a better position (90.7% per GDP) while the deficits in government budget of both countries are almost the same (-6.3% and -7.0%).

TCI DATA TABLE

Here are the Market Data of GBP/USD since the 26th of April 2013. In the last column you can see TCI data which after the 26th of April become a forecast.

Date

Close

Change

TCI

2013.04.01

1.52308

0.2224%

-2.80%

2013.04.02

1.51029

-0.8397%

-3.63%

2013.04.03

1.51279

0.1655%

-1.58%

2013.04.04

1.52341

0.7020%

-0.71%

2013.04.05

1.53377

0.6801%

1.45%

2013.04.08

1.52553

-0.5372%

0.55%

2013.04.09

1.53199

0.4235%

1.65%

2013.04.10

1.53302

0.0672%

1.40%

2013.04.11

1.53854

0.3601%

2.01%

2013.04.12

1.53436

-0.2717%

2.69%

2013.04.15

1.52843

-0.3865%

1.14%

2013.04.16

1.53632

0.5162%

1.96%

2013.04.17

1.52392

-0.8071%

1.95%

2013.04.18

1.52775

0.2513%

2.40%

2013.04.19

1.52297

-0.3129%

2.52%

2013.04.22

1.52913

0.4045%

3.18%

2013.04.23

1.52381

-0.3479%

2.72%

2013.04.24

1.52664

0.1857%

2.94%

2013.04.25

1.54332

1.0926%

2.89%

2013.04.26

1.54732

0.2592%

3.07%

(+1 day)

--Forecast Starts--

 

3.14%

(+2 days)

Peak-1

 

3.35%

(+3 days)

Correction

 

3.28%

(+4 days)

 

 

2.68%

(+5 days)

 

 

2.17%

(+6 days)

 

 

2.73%

(+7 days)

 

 

2.90%

(+8 days)

Peak-2

 

3.17%

(+9 days)

Correction

 

2.54%

(+10 days)

 

 

2.49%

(+11 days)

 

 

2.13%

(+12 days)

Peak-3

 

3.46%

(+13 day)

Trend Reversal

 

3.22%

(+14 day)

 

 

1.89%

 

Short Conclusion:

GBP/USD for the time is strong and it is possible to move to 1.5800 or even to 1.6300 during the following 2 weeks, but we should be extremely cautious if we decide to trade it intraday. The basic scenario suggests that we should expect intraday (or 1-day) corrections while this uptrend will go on.

 

□ Giorgos Protonotarios,

for Trading Center (April 28, 2013)

Free TCI Forex Signals: GBP/USD April 2013

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