Rising inflation supports British Pound
UK inflation hit 2.9% in May, and Bank of England left rates unchanged. But three members voted for rate hike against one vote for a hike in May. Will the British Pound continue strengthening?
On the daily chart the GBPUSD: D1 is testing the 200-day moving average MA(200).
- The Parabolic indicator gives a sell signal.
- The Donchian channel is neutral, it is flat.
- The MACD indicator is below the signal line and the gap is shrinking, which is a bullish signal.
- The stochastic oscillator is rising but has not reached the overbought zone.
We believe the bullish movement will continue after the price breaches above the fractal high at 1.2816. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the lower Donchian bound at 1.2635, confirmed also by the fractal low. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.2635) without reaching the order (1.2816) we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Buy stop