The GBPUSD pair started its extended bearish rally after rejecting the 200 weekly SMA (1.42455) on 22nd April 2018. Majority of the professional price action traders managed to make some decent profit by riding the extended bearish rally. The pair found some decent support at 1.24463 level and started its bullish correction. Though the pair formed a nice bullish pin bar right at the critical support level at 1.24463, the experienced traders waited in sideline since the market sentiment was extremely bearish due to Brexit event.
GBPUSD technical analysis
Figure: GBPUSD trading within the range of symmetric triangle pattern
Technically, the current price movement of the GBPUSD pair is still confined within the symmetric triangle chart pattern. Unless the market breaks the current triangle pattern, trading this pair is extremely risky. The price has rejected the 100 SMA in the 4-hour time frame which also coincides with the triangle resistance level. Over a period of time, the price is most likely to test the triangle support level at 1.30056 and any bullish price action confirmation signal will be an excellent opportunity to execute long orders.
Though the triangle support (1.30056) and resistance (1.30875) might offer short term profit taking the opportunity, the traders are advised to wait for a clear breakout of this pattern. According to the leading analyst of the Forex trading industry, the bears will have a tough time to break below the triangle support level since the level is reinforced by the 38.2% bullish Fibonacci retracement level. So any bullish price action confirmation signal near the critical support level at 1.30056 will be an excellent opportunity to execute fresh long orders. Moreover, a daily closing of the price below the 1.30056 level will confirm the end of the current bullish correction for this pair. It’s true the short term time frame traders will get lots of trading opportunity in the upcoming days but the conservative traders should wait for a clear breakout of the triangle chart pattern.
Potential market movements
If the price breaks below the triangle support level at 1.30056, the bears will drive the price down to the nearest support level at 1.29045(50% bullish retracement level, drawn from the low of 2nd January 2019 to the high of 13th February 2019).On the upside, the bulls need to clear out the triangle resistance level at 1.30875 to continue its bullish correction. A daily closing of the price above the major resistance level at 1.30875 will eventually lead this pair towards the next critical resistance level at 1.31407. This level is going to provide a significant amount of selling pressure to this pair, but a clear break of this level will eventually result in a retest of the critical resistance level at 1.33774.
Summary: Considering the overall technical parameters, the short time frame traders will have a decent trading opportunity near the triangle support and resistance level. But the conservative traders should wait for a clear breakout of the current triangle pattern to execute fresh orders in the global market.
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