Trading Cable in the past two years is definitely fun. First, traders tried to discount the result of the referendum. Surprisingly, investors bet on the wrong side and they were caught off the guard with the 'thanks EU but NO' vote. Later, apocalyptic visions took the control over and traders were trying to discount the hard Brexit option. That also seems to be not working out as that scenario is currently less likely to happen and those investors who were selling Pound at the end of the last year are now on a huge loss.
It seems that currently we are discounting the soft Brexit option as the GBPUSD is climbing higher supported by the long-term up trendline. Technically, since September, the price was in the long-term symmetric triangle pattern (black), which in the middle of November resulted with a bullish breakout. After that, the price created a trend continuation pattern – a pennant (blue), which resulted with a further upswing. After few days, we got another pattern – a wedge (red) and this time the result was the same - price broke the upper line and went north.
This week, at least the start of it, should be all about the 1.333 (orange area). Small bearish correction is possible but the overall mid-term situation seems positive. Bullish breakout here should definitely trigger a buy signal on the Cable. Positive sentiment will be denied once the price will create a bounce and a strong bearish breakout from this level, which currently seems less likely to happen.
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GBPUSD uses three bullish patterns to climb to the long-term resistance.
Published 11/27/2017, 04:46 AM
GBPUSD uses three bullish patterns to climb to the long-term resistance.
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