In 30 minutes we have the first UK GDP figure for 2013. It’s expected in at 0.0%. If the figure is negative then we enter a triple dip recession. That’s not something the coalition government wants on their watch.
Trading wise, the fact of recession doesn’t matter so much. The UK economy is flat lining so movement above and below zero should be expected.
There’s two negative factors to look at for where cable goes. Obviously a bad print say will be a sell. -0.1 to 0.5 will see us off probably a good cent. -0.5 or more will see cable crumble. Even a zero print will see cable sold in anticipation of further monetary policy action be it rate cuts or increased QE.
A positive number could also illicit a large jump also 100 pips or more as rate cuts and QE get put on the back burner.
So we have a 2/1 trading scope. 2 possible bad scenarios versus 1 positive. In such cases it’s wise to look at the longer chart timescales to see where the bigger levels are that could contain the moves.
As you will see from the chart we are still contained. within a long term channel and a shorter term one.
I would suggest that the moves may be contained by the 38.2 fib level and previous high up in the 1.5410/20 area on the upside, and the lower channel line down around 1.5200 and more so the 200 ma and lower short term trend line at 1.5180/90
If you’re going to trade it then best of luck.