Top Trade Idea For December 5th, 2014 – GBP/USD
Along with inflation, the US jobs number is the key driver of Fed monetary policy. This of course makes the jobs number a key driver for $US exchange rates. Heading into the number, a common technique for chart based traders is to look for situations that might trigger a trade setup if the jobs number misses expectations by a big enough margin to change market perceptions about Fed policy.
The GBPUSD chart looks as though it might fill that bill at the moment. As things currently stand, a jobs growth number that missed significantly to the downside could see a rally in GBPUSD. If it broke above resistance a double bottom pattern would be completed.
Looking at things the other way, a really good figure could see a break below the recent trading range and set up for a continuation of the downtrend.
If GBPUSD is still inside this range leading into the figure, my trade idea would be to wait for any immediate volatility to subside just after the release and then buy if there is a rally well clear of the resistance but sell if there is a break well clear of the support.
About Ric Spooner
Ric Spooner is Chief Market Analyst at CMC Markets in Sydney. He has over 30 years experience in derivates markets, and was previously a Managing Director at Sydney Futures Exchange Clearing, General Manager at JBWere Futures and Manager at Elders Futures.