Industry news:
US YIELD CURVE INVERSION TALKING POINTS: A key spread in the US Treasury yield curve – the 3m10s – is now suggesting that there is nearly a 33% chance of a recession hitting the United States within the next 12-months.The US yield curve inversion comes as US growth concerns around the US-China trade war have provoked the Federal Reserve into a more dovish policy stance.US recession fears thanks to the US-China trade war now see a 90% chance of 50-bps of interest rate cuts by the end of the year, and a 51% chance of 75-bps of interest rate cuts.Trading recommendation:
GBP is testing the key support level at the price of 1.2500 (round number), which will be critical for further development for the GBP/USD. Watch closely the level of 1.2500 cause buyers may load their position from this point. Buying is preferable
Green rectangle – Resistance 1 (1.2557)
Green rectangle- Resistance 2 1.2590)
Yellow rectangle – Important support (1.2500)
Red lines – Bullish divergence
All three oscillators are showing the bullish divertgence.RSI oscillator, Stochastic and MACD. As long as the GBP is trading below 1.2475, I would watch for buying opportunities with the targets at 1.2557 and 1.2590. I do expect reversion to the mean type of acrivity. I do expect that price back into 20 EMA (Median line of the Keltner Channel.)Only if there is clear breakout of the 1.2475, I would watch for potential selling opportunities but not now at the critical support 1.2500.