Improving UK statistics bullish for GB100
UK inflation and retail sales in August were better than forecast, indicating more robust economy than expected. Will the GB100 climb continue?
In the last couple of days UK economic data were better than expected. Retail sales rose 0.3% over month in August instead of an expected 0.2% decline. And inflation jumped to a six-month high of 2.7% from 2.5% when a decline to 2.4% was forecast. Earlier reports had indicated UK trade deficit narrowed drastically to £111 million in July from £942 million in June. And while the UK industrial output expansion slowed it still recorded 0.1% on month growth. At the same time wage growth accelerated in July. Stronger UK figures are bullish for GB100.
On the daily timeframe GB100: D1 is retracing higher after trading with negative bias for four months.
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The Parabolic indicator has formed a buy signal.
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The Donchian channel indicates no trend yet: it is flat.
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The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
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The stochastic oscillator is in the oversold zone, this is bearish.
We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 7387.97. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the lower Donchian channel at 7219.17. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (7219.17) without reaching the order (7387.97) we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
Position |
Buy |
Buy Stop |
Above 7387.97 |
Stop loss |
Below 7219.17 |
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This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
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