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Pound Drops On Chinese Data

The market declined to correct itself on Friday after the fall of the pound on Thursday. In Asia the GBPUSD jumped from the D3 to 1.4724. On the back of growth for the American dollar, the pound/dollar fell to the MA line D4 at the European session.

In Asia on Monday the British pound was trading in the red zone at 1.4609. Chinese data on foreign trade disappointed market participants. The Australian dollar reacted with a sharp fall by 70 points and dragged the euro/dollar and pound/dollar pairs down with it.

According to the published data, Chinese imports in March fell by 12.3% in comparison with the same period a year earlier (forecasted -11.7%, previous -20.5%). Exports fell by 15%, although economists expected them to grow by 12.0%.

The pound is now vulnerable because of the uncertainty connected to the 7th May parliamentary elections and the ambiguous macroeconomic statistics which are constantly forcing market participants to reassess their forecasts about the Bank of England lifting interest rates. So on the daily the closest target is 1.4490 and on the weekly, 1.4250.

After the falling to 1.46 on Monday I expect a correction to the 67th degree. That’s just the way I work. If on Friday there was no flat, then on Monday I’m always looking at movements against Friday. I know very well how it might not work against the trend.

Attention:

Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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