The British Pound is set to continue its rally against the US dollar
As the hours draw closer to the key US event of the week - the US non-farm payrolls data, our forecasters team is preparing for the next move in the GBP/USD binary options forex pair. As we have concluded from the chart that is attached, we would be much more keen to buy daily calls today.
The data which will be released at 12:30 GMT, can not do much to change the current outlook of a stronger pound. As the federal reserve maintains its exit policy at a turtle's pace, the Bank of England is much more likely to act sooner rather than later, especially in light of the stimulative monetary policy measures unveiled by the ECB yesterday.
The British currency has been affected by the bizarre Euro rally yesterday and has broken through new highs fro the week. As we see today the key levels on the downside are situated near the 1.6780-90 area. There is much scope for a further rally towards 1.6850, but only a visit is paid lower first.
This is the strategy which we will be employing for today - waiting for dips in the GBP and buying daily calls. As the risks are quite serious considering the fact that its non-farm payrolls day, we would perhaps not be as aggressive in our volume bets, just to stay on the safe side.
There is reason to believe that the US dollar could rally only if we see a number in the vicinity of 250,000 new jobs created. We expect that the number will be lower than that, coming most likely around 200,000. Any number below 180,000 would be very bearish for the US dollar.
If the pair manages to break below 1.6750 on a sustained hourly basis, we could see yet another attempt at 1.6700, however for now this remains a rather distant possibility for today's trading. Happy Friday and successful trading to our readers, stay tuned for more!