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Trade idea: Buy GBPUSD after two positive days
Alan Collins from 3c Analysis is looking to buy GBPUSD, the main reason being that Friday's rejection of the lows has formed a base that has led to two positive days in a row. In addition, he says the market is supported by a trend of higher daily lows that goes back to the beginning of July.
Alan explains that momentum studies are creating some positive signals but that trading will still continue to be volatile.
As a result, he is looking for the next move beyond 1.5600 to be sustained, probably forming a new platform for a multi-day test of August’s peak above 1.5700.
The pound gained strength this week, as a new data showed that UK construction grew at the fastest pace since September 2007.
Meanwhile, the Dollar rose on Tuesday after new data showed that US manufacturing grew last month at its fastest pace in more than two years.
The Bank of England policy makers are meeting on Thursday and are expected to the base rate of interest at a record-low 0.5 per cent.
00:52 minutes
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