Free TCI Forex Signals: GBP/USD
We will examine the Forex pair GBPUSD, which is currently trading within an uptrend channel. What’s interesting about GBP/USD is not just the uptrend itself, but the likelihood of significant fluctuations happening, either inside or outside this channel.
TCI Signal on GBP/USD & TCI Chart
| MARKET | INSTRUMENT | TARGET | CRUCIAL DATES (PEAK) | STOP LOSS |
|
|
GBP/USD 1.5473 (4/26/2013) |
1.6300 1.5830 |
+2 days or the 30th of April 2013 +8 days or the 8th of May 2013 +11 days or the 13th of May 2013 |
Stop-Loss: 1.5190-1.5215 |
First, let’s review the results of our previous TCI signal on gold.
Evaluating the Previous TCI Signal on Gold
In our last TCI signal, we predicted a bull rally in gold prices with two main targets: $1,419 and $1,459 per ounce. By today, April 28, both targets have been reached. Gold rose steadily, with only minor pullbacks near key resistance levels. This has likely been a rewarding experience for bullish day traders. The best trades happen when a market is technically oversold but fundamentally stable—and that’s exactly what we saw with gold.
» Here is our latest TCI signal -On the price of gold
GBP/USD Technical Analysis
The chart below shows the GBP/USD Forex pair from May 31, 2010, to May 26, 2013. At the bottom of the chart, you’ll find the TCI chart for GBP/USD over the same period.
MT4 Chart Explanation
Since January 2013, GBP/USD has been in an upward trend forming the channel A//B shown on the chart. Points marked (1), (2), and (3) are key resistance levels discussed below. The upper MT4 chart also includes a Fibonacci Retracement.
Simple TCI Indicator Chart Analysis
Looking at the TCI chart at the bottom for the same period (May 31, 2010 to May 26, 2013), TCI often peaked above +5.0%, which marks overbought levels. Currently, TCI on GBP/USD is around 3.1%, as shown in the chart and the data table at the end of this free signal. This suggests GBP/USD is not yet overbought, meaning the upward TCI trend could extend by about 2.0%. According to TCI analysis, GBP/USD may rise to between 1.5780 and 1.5810.
Resistance / Support and Periodic Peaks
At 1.5432 today, GBP/USD continues its uptrend, but this move is unlikely to be one-way. A clear channel formed by trendlines A and B likely keeps GBP/USD within its bounds.
Key dates where peaks and corrections may occur are:
a) +2 days or the 30th of April 2013
b) +8 days or the 8th of May 2013
c) +11 days or the 13th of May 2013
GBPUSD Resistance & Support Levels Here are some important resistance & support levels: Current Price: 1.5473 (26th April 2013) ↑-Resistance 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) ↓-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
-
If GBP/USD stays within the channel A//B, expect a steady upward trend with intraday corrections. (Basic Scenario)
-
If GBP/USD breaks above channel A//B, a quick rise could take it to 1.6300.
-
If GBP/USD breaks below channel A//B, it may test the previous low near 1.5215.
Trading Tip: Use the upper and lower bounds of the A//B channel as stop-loss points for short-term trades.
GBP/USD from a Fundamental Point of View — British Economy vs. US Economy
Here is a comparison of the two economies (UK and US):
Table: Comparison of GBP and USD fundamentals 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 LAST LAST UNEMPLOYMENT RATE Monthly 7.90% 7.70% PRICES LAST LAST INFLATION RATE Monthly 2.80% 2.00% MONEY LAST LAST INTEREST RATE Monthly 0.50% 0.25% FOREIGN RESERVES (USD Million) Monthly 104,749 151,895 GOVERNMENT LAST LAST 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 US economies usually follow similar economic cycles. The UK’s cycle is closer to the US cycle than to the Eurozone’s. When looking at GDP growth, the US economy is stronger (1.8% growth), partly because the US adopted a much more expansive monetary policy after 2008 than the UK did. Despite higher money supply and lower interest rates (0.25%), inflation is lower in the US (2.0%), which shows the FED is managing well. The unemployment rates are nearly the same in both countries (7.9% in the UK and 7.7% in the US). Regarding government debt as a share of GDP, the UK is in a better position (90.7% of GDP), while the budget deficits are similar (-6.3% in the UK and -7.0% in the US). TCI DATA TABLE Below is the market data for GBP/USD starting from April 26, 2013. The last column shows TCI data, which becomes a forecast from that date onward. {slider=TCI Data Table} Date Close High Low Change TCI 2013.04.25 1.54332 1.54794 1.52642 1.0926% 2.89% 2013.04.26 1.54732 1.54982 1.5418 0.2592% 3.07% (+1 day) 3.14% (+2 days) Peak 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 3.17% (+9 days) Correction 2.54% (+10 days) 2.49% (+11 days) 2.13% (+11 days) Peak 3.46% (+1 day) Correction 3.22% (+1 day) 1.89% (+1 day) 0.84% (+1 day) 1.63% (+1 day) 1.05% (+1 day) 0.90% (+1 day) 0.41%
Short Conclusion
GBP/USD is currently strong and could reach 1.5800 in the coming weeks. However, we should be very careful when trading it intraday. The main expectation is for intraday corrections to happen while the overall uptrend continues.
□ Giorgos Protonotarios,
for Trading Center (April 28, 2013)
Free TCI Forex Signals: GBP/USD April 2013
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