Two trades to watch: GBP/USD, DAX

GBP/USD rises after UK GDP beats, US retail sales, consumer sentiment due. DAX traces Wall Street lower, GDP data next.

Brexit 1

GBP/USD rises after UK GDP beats, US retail sales due

GBP/USD is on the rise after Britain’s economy grew at a faster pace in November than forecast. UK GDP grew 0.9% MoM in November, well ahead of the 0.4% estimated. This was also up from 0.2% in October and means that the UK economy has finally recouped the damage inflicted by COVID.

Looking ahead US retail sales are due at the end of a busy week for the US Dollar. US retail sales are expected to be flat in December, after rising 0.3% in November. Rising COVID cases and 7% inflation could be to blame.

Disappointing retail sales, after yesterday’s rising initial jobless claims, could send USD lower.

Learn more about the pound

Where next for GBP/USD?

GBP/USD is extending its rebound from the December low of 1.3160, retaking the 50 sma and pushing above 1.37 a critical resistance turned support.

The price has run into resistance at 1.3740 the 200 sma. The RSI is overbought so there could be a pull back on the cards ahead of further gains.

Buyers will need to break above 1.3740 in order to target 1.38.

Meanwhile, horizontal support at 1.37 is critical ahead of 1.36 January 5 high. It would take a move below 1.3510 to negate the near-term uptrend.

gbpusd chart

DAX traces Wall Street lower, GDP data due

DAX along with its European peers are heading for a weaker open on Friday tracing Wall Street southwards

US main indices closed sharply lower after jobless claim unexpectedly rose. Weakness on Wall Street combined with disappointing Chinese trade data has set a risk off tone to trade.

German GDP data is due shortly and is expected to show that the German economy grew 2.7% across 2021, after contracting -4.6% in 2020.

Where next for the DAX?

The DAX has been rebounding from 15000 reach on December 21, re-taking both the 50 & 200 sma. The price ran into resistance at 16285 its previous all time high and since eased lower.

The RSI remains in bullish territory, and the price above its 50 & 200 sma. It also trades above its rising trend line so the there could be more upside to come.

Buyers will be looking to break above 16000, the key psychological level in order to target 16285 and fresh all time highs.

A move below 15730 the 2022 low and 15610 the 200 sma could see sellers gain traction towards 15000.

DAX chart

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.