Sterling Remains Within Tight Range To The US Dollar Ahead of Non-Farm Payrolls
|Cable had a small rally yesterday, opening at 1.24155 to close the London session at just above 1.2500. However, price action remained once again within its tight range of 1.2512 and 1.2359 for the sixth consecutive trading session.
While the US dollar has rallied against all other major currencies the Pound has been more resilient in losing any more ground after it reached a recent low in October of 1.2020 after the overnight flash-crash, managing to regain some lost territory.
The Pound has been helped by stronger than expected economic data for GDP and unemployment which have helped keep the currency at its current levels. The Bank of England has also changed its dovish policy post Brexit referendum to a more hawkish one, leaving many punters to wait and see for further developments.
Tomorrow we will have more economic Data from the UK as Manufacturing PMI will be released at 09:00am. Forecasts are for a small increase to 54.5 after last month’s 54.3. A number above 50 is considered denoting an expanding economy and is bullish for the Pound.
Also on Friday we will be getting Non-Farm Payrolls for the US at 01:30pm. The Federal Reserve has repeatedly stated the importance of job growth for their timing in hiking interest rates; this number will be close watched. Forecasts are for an additional 174k jobs, anything short of that number may give Sterling a boost.
If you think Cable will rise after Friday’s economic data all you have to do is buy GBPUSD with Deal Cancellation protection. This feature allows you to take a position and set-up a maximum stop loss, which if hit during one hour, will only cost you the premium you paid to buy Deal Cancellation protection.
Deal Cancellation gives you the option to close a trade, during 1 hour, losing no more than the premium paid, while allowing you to profit from any positive price movement. The screenshot below shows that to buy £28,000 with a stop loss of €328.91 would cost €18.79 in Deal Cancellation protection.
If price increases from 1.25003 you will be able to close your trade for a profit, less the cost of Deal Cancellation. Let’s say price rises to 1.26003 then your profit would be €263.13 - €18.79 = €244.34, while your maximum risk for one hour would be €18.79.
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