Explosive Look Ahead to ADP and NON-Farm
General Market Outlook
Welcome to the beginning of a new month and what an action packed two days of trading we have ahead. Looking at the economic calendar today we have PMI data releases for GBP and also for USD, and don’t forget ADP. On Friday we have more PMI data from Europe and of course NON-Farm Payrolls. Please remember that these events are highly volatile, if you have trades open make sure to have stops well placed and as always wait for at least 1 hour for normal market sentiment to return.
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GBP Daily Outlook
The GBP/USD pair has been trading below the secondary downtrend line, as you could see on the chart. From the technical point of view, it appears that the bullish strength in this pair is running out, and it is likely that for the next few days this pair will be trading near the 200 day moving average period (blue) around 1.5850. So we recommend selling the pair below the trend line, around 1.6125 with objectives to the psychological level of 1.60. If the downtrend continues, keep order until 1.5850.
Moreover, a breakdown of downtrend line will enable the start of an upward movement to1.63. Thus, we recommend buying above the bearish channel.
It is recommended to operate with low leverage on these markets. Place always stop loss.
GBP Weekly Outlook
GBP/USD – Weekly and Monthly Pivot Points and Signals
The British pound is a few pips above the weekly pivot level and is above the 200 day moving average periods (blue). Therefore, the pivot points indicate the following.
Once the price closes below 1.6055, a move towards the nearest support of 1.5965 and even the 200 day moving average periods (1.5870) is likely to be.
Above the weekly pivot the pound can resume its upward movement to the target of 1.63. Therefore, we recommend buying at the end of the session today only if the pair closes above the 1.6055 pivot point.
1.6055 and 1.6100 are weekly and monthly pivot points for this week for GBP/USD.
Signals for October 29 – November 03, 2012
Buy if it closes above 1.6055, take profit at 1.6195 and 1.6285, and stop loss is bellow (W_S1).
Sell if it closes below 1.6055 (W_PV), take profit at 1.5870, and stop loss is bellow 1.5941 (W_S2).
Weekly – R3 = 1.6425
Weekly – R2 = 1.6285
Weekly – R1 = 1.6195
Weekly Pivot = 1.6055
Weekly – S1 = 1.5965
Weekly – S2 = 1.5825
Weekly – S3 = 1.5735
EUR/USD Buy Above 1.3005 (fractal)
The euro yesterday exceeded the weekly pivot 1.2967 and managed to return back to Fractal 1.3005, up 1.3020. Now it is showing a small correction, it is likely that the euro could fall to 1.2920, but the most likely that if the pair traded above 1.2967, the bullish movement extends to 1.3120. There are many resistances above 1.3150, and it will be very difficult to reach the 1.35 level key operators.
According to the chart, we can see that the euro is above the main uptrend and below the secondary downtrend line. The break of 1.3120 will be the start for the pair to reach the levels of 1.33 and 1.35. On the other hand, if the main trend line is broken and if the pair closes below the 200 day moving average periods, a fall to 1.25 will be started. Now we’re stuck in a consolidation of the euro. So we must be very careful.
Euro Weekly Outlook
The euro is located below the weekly pivot point and above the Moving Average of 200 periods. Accordingly, the pivot points signify the following.
The euro is trading a few pips below the weekly pivot, near this level a downward movement is likely to be seen.
On the other hand, above the weekly pivot the euro can take upward force and return to the levels of 1.3150 (strong resistance). Also, if the price breaks below the 200 day moving average periods, a start of a new sequence bearish until 1.25 is likely to be.
In the short term, the euro will remain bullish above the 200 day moving average periods.
1.2967 and 1.2843 are weekly and monthly pivot points for this week for EUR/USD.
Signals for October October 29 – November 03, 2012
Buy long if it closes above weekly pivot at 1.2967, take profit at 1.3053 and 1.3167, and stop loss is below weekly support of 1.2767 (W_S2).
Buy if it rebounds around the support of 1.2853, take profit at 1.2967 and 1.3167, and stop loss bellow 1.2767 (W_S2).
Weekly – R3 = 1.3253
Weekly – R2 = 1.3167
Weekly – R1 = 1.3053
Weekly Pivot = 1.2967
Weekly – S1 = 1.2853
Weekly – S2 = 1.2767
Weekly – S3 = 1.2653