New Highs Achieved for Sterling-Dollar Pair

On Thursday 13 April 2017, the GBPUSD pair traded at 1.2575 before reversing. The run-up to the Easter Weekend trading session proved to be an auspicious period for the GBP, with modest gains recorded. For the most part, Wall Street bourses racked up multi-day losses as bellicose activity elevated investor concerns and a risk-off approach was adopted to equities markets. The US dollar index is trading at 100.58, up slightly (Thursday 13 April), but trading lower over a 5-day spell. The US Dollar index reflects a bearish perception of the greenback in recent days as ‘Trumpflation’ hopes fade amid gridlock and political manoeuvring in Washington DC.

Several important economic indicators should be taken into consideration for binary options currency traders of the cable from the USD perspective

• The inflation rate in the US is at 2.4% for March (year-on-year) from 2.7% in February (year-on-year). This results in bearish sentiment for the USD and drives up the GBP/USD pair.

• Retail sales in the US are down 0.2% for the month of March.The month-on-month decline is a slight improvement from the -0.3% in February 2017, but hardly regarded as a positive factor for the USD.

From the other side, here are some important GBP indicators to factor in

For the week ending April 13, 2017 the GBPUSD pair made modest gains. At the close of the trading session, the cable was up at 1.2517. For the week ahead, there are few economic indicators to speak of, but UK retail sales on Friday April 21, 2017 are an important indicator.  The GBP moved up against the greenback last week on the back of better-than-expected wage growth. Consumer Price Index (CPI) data also improved and this was in sharp contrast to US data which disappointed analysts. For the upcoming week, we could see further upside momentum for the GBPUSD pair with the following events taking place later this coming week:

• Mark Carney will be addressing delegates at the Finance Policy Summit in Washington DC on Thursday 20 April 2017. This could prove bullish to the GBP. He will also deliver a speech and clarify Bank of England monetary policy at the FPS.
• On Friday 21 April 2017, UK economic data will be released. The retail sales data will prove important for currency traders since it will offer indications of where the GBPUSD pair is moving.
• Further, Monetary Policy Committee (MPC) member M. Saunders will be speaking at a London event on Friday 21 April 2017. If his speech indicates a more conservative position on monetary policy this could bolster the strength of the GBP and propel the GBPUSD Pair towards 1.26.

Which Direction Should Binary Options Currency Traders Hedge their Bets on the GBP/USD Pair?

Trading will be light on Monday 17 April 2017 owing to Easter Monday in the UK. This will limit activity on the GBPUSD pair and many other currencies since London is the epicentre of forex trading. Plus, there is limited activity from the US perspective and this will make for a rather lacklustre week of trading ahead. Some US economic data releases to look out for include the Industrial Production and Capacity Utilization on Tuesday 18 April. For the UK, it’s the Retail Sales on Friday April 21 2017 that will move the needle. The dollar is unlikely to rack up strong gains this week as Trump Trade has proven inefficacious. Back in Blighty, Brexit fears are always present and this will also depress much of the momentum for the GBP.

The short-term trend is modestly bullish and this may be enough to warrant call options on the GBPUSD pair.