Taking the analysis on the Dollar Index into consideration (note the Dxy I use is not weighted) we have Dollar pairs trading in a similar fashion. When looking at GBPUSD daily you will notice that price is currently in the middle of the range with the future strength or weakness of the Dollar to decide the direction of the next trend. As with our view on the Dollar, one could wait for price to be at support (bottom of the range) or resistance (top of the range) or wait for a breakout.

Below are the scenarios for bulls and bears for the week ahead. I have also included a view of March with next month’s pivot points taken into consideration.

GBPUSD Daily

Price is currently in the middle of the range with 1.41 as the top of the inside range and 1.4250 as the top of the outside range. 1.38 marks the bottom of both ranges. Price is bearish so one would expect price to head down to the bottom of the range - this is scenario A. There is less evidence to support a move to the top of the range though I have marked this as scenario B in any case.

GBPUSD Scenario A

If your bias is price heading down to the bottom of the range then you are looking for opportunities to short at confluence of MPP and WM3 with a target of WM1 - which is the bottom of the range. Note the H4 stoch is currently bullish though heading towards overbought in a range.

GBPUSD Scenario B

If your bias is price heading up to the top of the range then you will be looking for opportunities to go long at WM2 with a target of WM4 - this is the top of the inside range.

GBPUSD Scenario C

If your bias sees price continuing to range between support and resistance then you would wait for a breakout and trade the pullback.

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