GBPUSD Consolidates Ahead of US Industrial Production News

The Great Britain Pound (GBP) extended upside movement against the US Dollar (USD) on Monday, increasing the price of GBPUSD to more than 1.5540 ahead of some key economic releases. The technical bias remains bullish due to a Higher High in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded near 1.5541. A support may be noted around 1.5529, the 38.2% fib level ahead of 1.5508, the 50% fib level and then 1.5466, the swing low of the last major dip as demonstrated in the following chart.

On the upside, the pair is expected to face a hurdle near 1.5555, the 23.6% fib level ahead of 1.5596-5600, the confluence of psychological number as well as high of the last major upside rally. The technical bias will remain bullish as long as the 1.5466 support area is intact.

US Industrial Production

The Industrial Production in the world’s largest economy remained 0.2% in May as compared to -0.3% in the month before, according to the median projection of different economists. Generally speaking, higher industrial production figure is considered positive for the US economy thus a better than expected actual outcome  will be seen as bearish for the cable and vice versa.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a hourly closing above the 1.5600 handle as described above. It is always recommended to use proper risk and reward ratio to optimize profitability in forex trading,

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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