Trading News Events: U.K. Jobless Claims
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, 07-20-2016 at 08:50 AM (1028 Views)
Trading the News: U.K. Jobless Claims Change
Even though U.K. Jobless Claims are projected to increase 4.0K in June, another pickup in household earnings may generate a bullish reaction in GBP/USD as it highlights an improved outlook for growth and inflation.
What’s Expected:
Why Is This Event Important:
Signs of stronger wage growth may prompt the Bank of England (BoE) to retain its current policy at the next interest-rate decision on August 4 as the central bank runs the risk of overshooting the 2% inflation-target, and Governor Mark Carney may attempt to buy more time even as the U.K. prepares to leave the European Union (EU).
How To Trade This Event Risk
Bullish GBP Trade: Job/Wage Growth Picks Up in June
- Need green, five-minute candle following the print to consider a long GBP/USD trade.
- If market reaction favors buying sterling, long GBP/USD with two separate position.
- Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
- Move stop to entry on remaining position once initial target is hit, set reasonable limit.
Bearish GBP Trade: U.K. Labor Market Report Fails to Meet Market Forecast
- Need red, five-minute candle to favor a short GBP/USD trade.
- Implement same setup as the bullish British Pound trade, just in reverse.
Potential Price Targets For The Release
GBP/USD
- The string of failed attempts to closes back above 1.3360 (50% expansion) to 1.3370 (78.6% expansion) may invalidate the inverse head-and-shoulders formation carried over from the previous month, with the pair at risk of giving back the rebound from 1.2788 as the pair appears to be carving a near-term high.
- Key Resistance: 1.4880 (50% retracement) to 1.4930 (38.2% expansion)
- Key Support: 1.2460 (61.8% expansion) to 1.2500 pivot
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