Here are the key factors to keep in mind today for British Pound trades:
- UK Markit/CIPS Composite PMI: Despite the better than expected UK Markit/CIPS Composite PMI for January which rose to 56.7 the British Pound was unable to amount a strong rally. The UK Markit/CIPS Composite PMI came in much better than the 55.5 economists expected. December’s UK Markit/CIPS Composite PMI was revised higher to 55.3.
- UK Markit/CIPS Services PMI: The service sector was also unable to rally the British Pound as the UK Markit/CIPS Services PMI was reported at 57.2. Economists predicted an increase to 56.3 for January against December’s reported figure and unchanged figure of 55.8.
- UK Lloyds Business Barometer: The Lloyds Business Barometer rose to 49 in January which marks a healthy uptick from December’s 45.
Here is the key factor to keep in mind today for US Dollar trades:
- ADP Employment Report: Economists expect far less jobs to have been created by the private sector in January than in December. The ADP report is expected to show an increase of 220,000 jobs for January. December saw an increase of 241,000 jobs. This could be a guide for what forex traders may be faced with on Friday when the US will report the much awaited non-farm payroll report for January.
- ISM Non-Manufacturing Report: The service sector, which account for roughly two-thirds of all US economic activity, is expected to show weakness and follow in the footstep of many other economic reports released out of the US. The ISM Non-Manufacturing Report is expected to show a level of 56.4 in January. This can be compared to the ISM Non-Manufacturing Report of 56.5 from December.
Should price action for the GBPUSD remain inside the 1.5175 to 1.5225 zone or breakdown below it the following trade set-up is recommended:
- Timeframe: H1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.5180
- Take Profit Zone: 1.5030 – 1.5050
- Stop Loss Level: 1.5285
Should price action for the GBPUSD breakout above 1.5225 the following trade set-up is recommended:
- Timeframe: H1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.5250
- Take Profit Zone: 1.5380 – 1.5400
- Stop Loss Level: 1.5175
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