GBP Is Searching For Direction

Picture of British Pounds
GBP is trying to break out of its range on stronger economic data and news it will stay in the EU.

The economic data from the United States continues to be mixed with a large beat last week in existing home sales followed by a lower than expected PMI number earlier today. Meanwhile the British Pound has gained strength on last week’s retail sales numbers and news that the EU Referendum vote will likely result with the UK staying in the EU.

How to trade GBPUSD

Surprisingly, GBPUSD is trading lower today around 1.44743. Be looking to buy the pair going into the week around 1.44 and expect it to rise with a strong GDP number out of the UK on Thursday and a weaker than expected Preliminary GDP number out of the US on Friday.

Fed Chair Janet Yellen is speaking on Friday and she could also add fuel to GBP bulls if this week’s US economic data disappoints the market.  If she cites a disappointing week of information then Fed “hawks” would likely lose the vote for a June or July hike.

How to trade EURGBP

As we get closer to the referendum vote look to buy the dips in GBP versus USD.  There could also be a an opportunity to short EURGBP if it rises back to the .78 level.

Another option would be to short EURGBP around .773 with the stop at .7805 with a target at .7565. Be weary of volatility because it will be entering as we get closer to the referendum vote.

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