GBPUSD Downward Correction to Shock Traders

GBPUSD Downward Correction to Shock Traders

Forex

GBPUSD

GBPUSD Rising Channel Breakdown | Potential Selloff to 1.5000

GBPUSD seems to be done with its recent uptrend, as price is making an attempt to break below the rising channel support on its 1-hour time frame. The pair is currently testing support at the 1.5400 major psychological level, still deciding whether to bounce or to break depending on today’s events.

 

The UK manufacturing PMI is up for release and it might show a climb from 53.0 to 53.5. If the actual results meet or beat expectations, GBPUSD could bounce off channel support and gradually head back up towards resistance near the 1.5550-1.5600 psychological levels.

On the other hand, a weaker than expected reading could set the tone for the next PMI releases over the week and the upcoming BOE rate statement. Traders could price in expectations for the event as well, with most analysts expecting a relatively upbeat statement from Carney as usual.

Later on in the week, the NFP release could also be a catalyst for a big move. Another strong increase in hiring is expected, which could renew expectations for a Fed rate hike in June and lead to strong dollar gains. If so, GBPUSD could make its way back down to the key support level near the 1.5000 major psychological support.

USDCAD

USDCAD Descending Triangle | Resistance at 1.2550

USDCAD is still moving inside its descending triangle pattern and just recently bounced off the formation support near the 1.2400-1.2450 levels. For now, the pair is headed back to the top of the triangle near the 1.2550-1.2600 area.

Event risks for this trade setup include the BOC interest rate decision, which might indicate another rate cut from the central bank. If so, USDCAD could make an upside break past resistance and go for as much as 400 pips in gains, which is the same height as the chart pattern.

On the other hand, a relatively optimistic statement could renew support for the Loonie, which is also drawing support from the pickup in oil prices. Data from the Canadian economy has been mostly weaker than expected though, which suggests that a downbeat statement is possible.

Other event risks for this setup include the US NFP report on Friday, which is expected to post another strong increase in hiring and renew June Fed rate hike expectations. Disappointing results, however, could lead to dollar weakness and another test of USDCAD’s triangle support or perhaps a downside break.

Stocks

WYNN Shares Downtrend | Another Test of Support at $140/Share

Shares of Wynn Resorts Ltd seem to be starting a longer-term downtrend, as the shorter-term 50 simple moving average is treading below the 200 simple moving average. MACD is also moving down from the overbought zone, indicating a pickup in selling pressure.

In that case, a drop towards the near-term support around $140/share is in the cards and a potential downside break might take place. If so, WYNN shares could be in for a steeper drop, as this would confirm the bearish flag downside break.

RSI also reflecting a pickup in selling momentum, although the indicator is almost in the oversold region already. This could mean that a quick bounce is possible off the $140/share support zone and a potential retest of the resistance around the 50 SMA, which could hold as a dynamic inflection point.

A strong bounce, however, could mean a move towards the $150/share level, which is an area of interest for the stock. This could hinge on the outcome of US data, particularly the personal spending and income reports today and the NFP report up for release on Friday. Strong hiring and consumer spending data could mean more revenue for the company, which might keep the st