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GBP/USD Forecast 5 May 2016

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GBP/USD Forecast May 5, 2016
4/5 of 3 ratings

The cable has demonstrated active sales for the last days

Three factors make the reason for the sale: a sharp correction after continuous growth since mid-April, the current concerns about Brexit, as well as the rather weak economic data.

Yesterday we learned that the construction sector is under pressure due to uncertainty about Brexit. Today, perhaps, we can understand that the service sector does not feel well for the same reason.

If the Services PMI shows growth, the pair GBP/USD may show a sharp rise, the weak dollar can contribute. However, the Services PMI is projected to decline from 53.7 to 53.5. Today the US does not publish important news.

Tomorrow we expect that NFP would be quite positive. Today we expect the decline of the pound.

How to trade

The continuation of upward movement is possible after the breakdown of 1.4575. The short-term downward movement is possible in the range of 1.4472 - 1.4427. We would buy call options if the pair rises above 1.4575. We would buy put options if the pair falls below 1.4472.

Expiry time: 20:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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