The pound had a relatively good week last week with gains over its major counterpart,the greenback. Even though no changes were made at last week’s interest rate decision, we saw the pound gaining ground amid unexpected hawkishness coming from one of the BoE members who voted for a rate hike. She maintained that UK’s inflation is almost where the bank targeted and some tightening would need to be done as the BoE’s main contention right now is inflation. I believe that Brexit will continue to dominate market participants sentiments regarding the pound. Article 50 is said to be triggered any time in the next two weeks.

GbpUsd Daily Chart

We saw price break the bottom of the range it was trading within towards the end of the month. It is currently at the role reversal retesting the psych level 1.2400 as resistance. Stochastic is overbought and there is divergence between it and price action. Market action moving averages look flat as the angle separation between them is not that great.

GbpUsd H4 Chart

Price opened at a bear area zone. With a heavily overbought stochastic, we might see price break down through the immediate support and find a key level of support at the weekly pivot also with the 21 possibly acting as dynamic support. Conservative bears might look for selling opportunities at the role reversal at 1.23500.

GbpUsd H1 Chart

There is confluence between DM3 and WM3 at psych 1.24000. This is a key level of resistance that bears would consider selling. Another level that I would look for another short entry would be a retest at MM2 (1.23500) as some traders wouldn't feel comfortable selling when price is within the bull area zone on the daily chart.

One thought on “GbpUsd Short Technical Setup”

  1. Teboho Faro says:

    Great setup man

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