GBP/USD has recently made a strong convincing forex trading online break past its yearly highs at the 1.7000 major psychological level, indicating a continuation of the long-term rally. However, price has retreated back to the 1.7000 area after reaching highs past the 1.7060 levels.
Stochastic is also exhibiting a bearish divergence, which indicates forex trading online trend exhaustion. The technical indicator is currently pointing down from the overbought level, which means that bulls might not be ready to push the pair higher anytime soon. This could mean that a pullback near the broken resistance area is in play.
Going long at the 1.7000 level with a stop below the 61.8% Fibonacci retracement level at 1.6975 could yield a high return on risk if one aims for new highs. Moving the stop to entry once price tests the latest resistance at 1.7060 could be a good way to protect forex trading online profits.
Forex Trading Online Forecast
Recall that the BOE recently emphasized their hawkish bias, as the minutes of their latest monetary policy committee meeting revealed that policymakers are looking to hike interest rates this year. This is mostly because the U.K. economy showed signs of a pickup while rising home prices might warrant tighter monetary policy sooner or later.
BOE Governor Carney has already expressed this bias earlier in the month when he spoke of hiking rates sooner rather than later. He previously mentioned that the BOE was ready to tighten before the UK general elections take place next year.
As for the US, the FOMC statement turned out much less dovish than what many forex trading online analysts expected. For one, the Fed downgraded their growth forecasts for the year, although they upgraded employment and inflation estimates. Yellen decided against giving a timeline for interest rate hikes, saying that future monetary policy changes will continue to be dependent on a wide range of data.
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