Trading insight: Ride the trends and don’t fight the momentum

Market Talk

Source: Tradingview May 16 2023 6:43 UTC

The above chart illustrates the US100 index technical observations including:

• Trend analysis: Current price is above all major moving averages, indicating a very strong uptrend, MACD above equilibrium signifies bullish trending conditions.
• Momentum analysis: Relative Strength Index (RSI) is bullish since RSI is above 50 and sloping upward, indicating momentum has been increasing.

Commentary: Current price 13,400, resistance at 13,427 (13 week high). Prospects for further advance towards 13,744 and 14,552 can not be ruled out over the short to medium term (14-49 days). Downside risk spotted below the 12,765 key support.

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Today’s economic calendar

The above chart illustrates US retail sales month on month with the latest forecast.

United States Retail Sales on deck today

• Retail sales expected to show month on month increase

UK unemployment increased slightly, while average weekly earnings (AWE) increased by 5.8%

GBP FX Market reaction:

• GBP weakened against the JPY, EUR, and USD following the latest UK employment report (see today’s economic calendar below for details)

Source: TradingView / J. Knobel May 16 2023 6:17 UTC

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Trading bullets

GBP/USD bullish outlook, however, current price remains vulnerable to a further short term price correction.

• GBP/USD current price 1.2490 for the very short term (5-13 days) appears to be in a price correction cycle from the March - May uptrend advance. Key support spotted near 1.2345 (see chart), while key resistance is at 1.2650. Above 1.2650 could trigger a resumption of the prevailing multi-month uptrend, while a break below the 1.2345 key support places the prevailing uptrend at risk.