GBPUSD as a Entry point after PMI RELEASE
Updated
S&P Global/CIPS UK Services PMI
12 Months statical Analysis
Model indicates a forecast of 53.6 (Expanding Conditions)
Model indicates GBP appreciation will not hold long term value due to economic conditions
Probability of a 58% chance of the GBP appreciating 16% Monday 1:30AM
Scenario model that used similar forecast and historical data with similar conditions add the 1.1 to the current general public forecast of 52.5 (Trading Economics)
Actual Forecast Prev
Jul 05, 2022 (Jun) 54.3 53.4 53.4
May 05, 2022 (Apr) 58.9 58.3 58.3
Feb 03, 2022 (Jan) 54.1 53.3 53.6
On both occasions companies who were surveyed carried a conservative view toward the service sectors each time the market was more aggressive than initially believed.
Based on model the average Daily return starting at market open for GBP/USD the upside from a PMI catalyst in the rolling 12 months was 0.78% with an average draw down of -0.38%. This can be used as a single trade or a entry point for betting on the appreciating USD
This PMI currently holds a 12 Month SP 500 CORRELATION of 0.49 indicating a Low correlation allowing for little to no market influence the behavior of the asset.
GBP Average high based on PMI catalyst from previous data with an expanding outlook was 78% however holding this asset in attempts to capture that upside is considered to be risky so I will be taking a more conservative approach of a profit target of 19% as this amount had better results during the 12-month rolling back test.
Technical Analysis
Price Behavior: Shows price action just above the 1.4980 Support level after a 2-week GBP sell off and text book trend to the down side.
MACD: is holding downside bias at -0.00899 which historically lead to a distribution phase and even a reversal how ever for the outright reversal to occur there would need to be a outright catalyst that changes the short term narrative of the GBP economy.
ADX and DI indicators are also suggesting a weakening trend also indicting an approaching support level, this would track with my current narrative of a quick appreciation of the GBP against the USD from the scheduled PMI release allowing for a great entry point for a short Position.
Volume: 20 day trading volume is currently holding at 186K as of today however the last two trading days have showed below average volume with Fridays volume at 176.6K indicating a trend beginning to enter into the distribution phase.
Still working on my Geo Risk model will add later today.
GBPUSD
12 Months statical Analysis
Model indicates a forecast of 53.6 (Expanding Conditions)
Model indicates GBP appreciation will not hold long term value due to economic conditions
Probability of a 58% chance of the GBP appreciating 16% Monday 1:30AM
Scenario model that used similar forecast and historical data with similar conditions add the 1.1 to the current general public forecast of 52.5 (Trading Economics)
Actual Forecast Prev
Jul 05, 2022 (Jun) 54.3 53.4 53.4
May 05, 2022 (Apr) 58.9 58.3 58.3
Feb 03, 2022 (Jan) 54.1 53.3 53.6
On both occasions companies who were surveyed carried a conservative view toward the service sectors each time the market was more aggressive than initially believed.
Based on model the average Daily return starting at market open for GBP/USD the upside from a PMI catalyst in the rolling 12 months was 0.78% with an average draw down of -0.38%. This can be used as a single trade or a entry point for betting on the appreciating USD
This PMI currently holds a 12 Month SP 500 CORRELATION of 0.49 indicating a Low correlation allowing for little to no market influence the behavior of the asset.
GBP Average high based on PMI catalyst from previous data with an expanding outlook was 78% however holding this asset in attempts to capture that upside is considered to be risky so I will be taking a more conservative approach of a profit target of 19% as this amount had better results during the 12-month rolling back test.
Technical Analysis
Price Behavior: Shows price action just above the 1.4980 Support level after a 2-week GBP sell off and text book trend to the down side.
MACD: is holding downside bias at -0.00899 which historically lead to a distribution phase and even a reversal how ever for the outright reversal to occur there would need to be a outright catalyst that changes the short term narrative of the GBP economy.
ADX and DI indicators are also suggesting a weakening trend also indicting an approaching support level, this would track with my current narrative of a quick appreciation of the GBP against the USD from the scheduled PMI release allowing for a great entry point for a short Position.
Volume: 20 day trading volume is currently holding at 186K as of today however the last two trading days have showed below average volume with Fridays volume at 176.6K indicating a trend beginning to enter into the distribution phase.
Still working on my Geo Risk model will add later today.
GBPUSDTrade closed: target reached
PMI Model was off on the forecast by 1.1 BP however trade was executed profitably
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