GBPUSD - Pullback Before A Continuation Higher!
Updated
Analysis:
Looking at the charts we're clearly able to see that price is in an upwards trend. We've been forming higher highs and higher lows which shows us the trend we're in so knowing this we're only looking for long setups on this pair. We also have a key level which we've marked out where we've previously seen a strong rejection from but we've since broken higher and we're currently retesting this previous level of resistance for support. As we know resistance very often becomes support which is what we're expecting to happen now. To further add to our idea and why we think price will head to the upside from this level, we also have the 38.2% fib retracement level. Whilst this isn't the strongest level we still do often see this area hold and with this fib retracement level being at our area of support we expect that it will hold and we'll see buyers step in, pushing price higher. Another confluence factor that we have is the upwards trendline that is present. When this trendline has been tagged before we've seen buyers step in and push price higher. This trendline also lines up with our area so we have a really strong level of support which is why we think this is a good place to enter. The fundamentals as well favour our idea. Currently the USD is the strongest major currency whilst the GBP is the 3rds strongest major currency. Whilst this doesn't go in our favour, if we dig a little deeper we can see why we are actually fundamentally bullish on the GBP over the USD. As of the most recent report for institutional positioning we saw a decrease in both long and short positions for the USD so this is neutral whereas for the GBP this is an entirely different story. As of the most recent report for institutional positioning on the GBP we saw a massive increase in long positions whilst also seeing a massive decrease in short positions so this is very bullish for the GBP and this looks like to us, early signs of possible bullishness to come for the GBP. With the technicals and fundamentals both pointing to buy the GBPUSD we get a bullish outlook for this pair. This position will also help to hedge our USD positions as we are heavily involved in the USD currently and with this position we're able to make money if the USD goes up or down because we're hedged. At JPI we like to hedge certain positions when we're exposed as this allows us to better manage our risk and with such a bullish setup on GBPUSD this seems like a perfect pair to hedge positions against.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read and responded to. We any comments at all so thank you!
Stay Safe - The JPI Team
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Looking at the charts we're clearly able to see that price is in an upwards trend. We've been forming higher highs and higher lows which shows us the trend we're in so knowing this we're only looking for long setups on this pair. We also have a key level which we've marked out where we've previously seen a strong rejection from but we've since broken higher and we're currently retesting this previous level of resistance for support. As we know resistance very often becomes support which is what we're expecting to happen now. To further add to our idea and why we think price will head to the upside from this level, we also have the 38.2% fib retracement level. Whilst this isn't the strongest level we still do often see this area hold and with this fib retracement level being at our area of support we expect that it will hold and we'll see buyers step in, pushing price higher. Another confluence factor that we have is the upwards trendline that is present. When this trendline has been tagged before we've seen buyers step in and push price higher. This trendline also lines up with our area so we have a really strong level of support which is why we think this is a good place to enter. The fundamentals as well favour our idea. Currently the USD is the strongest major currency whilst the GBP is the 3rds strongest major currency. Whilst this doesn't go in our favour, if we dig a little deeper we can see why we are actually fundamentally bullish on the GBP over the USD. As of the most recent report for institutional positioning we saw a decrease in both long and short positions for the USD so this is neutral whereas for the GBP this is an entirely different story. As of the most recent report for institutional positioning on the GBP we saw a massive increase in long positions whilst also seeing a massive decrease in short positions so this is very bullish for the GBP and this looks like to us, early signs of possible bullishness to come for the GBP. With the technicals and fundamentals both pointing to buy the GBPUSD we get a bullish outlook for this pair. This position will also help to hedge our USD positions as we are heavily involved in the USD currently and with this position we're able to make money if the USD goes up or down because we're hedged. At JPI we like to hedge certain positions when we're exposed as this allows us to better manage our risk and with such a bullish setup on GBPUSD this seems like a perfect pair to hedge positions against.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read and responded to. We any comments at all so thank you!
Stay Safe - The JPI Team
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Trade active
Our entry requirements have been met and our order has been filled so we're now long GBPUSD expecting that price is just pulling back before we see a continuation higher. Keep an eye out for updates!Note
Update - 1This is a trade that has started off amazingly. We've seen price react with a strong bullish candle off of our entry, forming a bullish engulfing which is a strong bullish reversal candlestick pattern so this is looking good for our trade. The strong bullish candle shows the bullish momentum and the GBP strength that we've been speaking about recently. Everything is look good so far and we'll be waiting for this coming week to see if we can get this bullish momentum to continue.
Note
Update - 2Yesterday we did have some news come out for the USD however this didn't really affect the markets. Today is a bank holding in the US so we don't expect to see much price movement in regards to the USD. Tomorrow we have FOMC meeting minutes coming out which will provide a lot of momentum into the markets. We won't know if this news is bullish or bearish until we get the news release but once we do know and once we see how the market reacts we'll be sure to update you all. Something else to note is that as of the most recent report for institutional positioning we saw the USD stay neutral but for the GBP we saw a decrease in short positions and an increase in long positions, indicating to us that the GBP has more bullishness to come, which favours our idea. Currently we're sat at a possible area of resistance. If we're able to see price break above this area then this will provide us with even more bullish clarity and will favour our idea so this is what we'll be looking for in the upcoming days. We'll update you all on our thoughts once we get the news release and see how the market reacts.
Note
Update - 3FOMC came out yesterday, however this didn't favour our idea but we didn't really see much bearishness either, showing us the GBP strength and bullishness that we have currently. Later today we have a lot of USD news due to come out which will affect our trade. If the news is bearish for the USD then we'd expect to see price breakout above the resistance level mentioned in our previous update for this pair and push higher. If the news is bullish for the USD then we will have to wait for the market to react and see if the GBP bulls can hold up against the USD bulls. This will be an interesting pair to watch as the news comes out today. As always we'll keep you updated.
Note
Update - 4Yesterday we had some news come out for the USD, which ended up being a bit mixed and this was reflected in price as we saw the USD bulls sit on the side lines as the GBP strength took over and broke above the area of resistance we thought might hold. This price action looks positive for our trade. Currently we are sat at an area which could hold as resistance so this is something we need to watch out for. Even if this area does hold as resistance, we're still bullish on this pair and with the NFP data that is coming out today, we could see price break above this area, which would look strong for our trade and the GBPUSD bulls. For now there isn't anything we can do other then sit and wait for the NFP data to come out, but once that does and once we see how the market reacts we'll update you all.
Trade closed: target reached
Trade Closed(+1.07R) Made
After Trade Comments:
We had some news today that came out for the USD, which was worse then expected, resulting in price making a move to the upside and hitting our take profit. Overall this has been a great trade and it's clear to see the GBP strength. Price didn't really get held up anywhere and just went to our straight up to our take profit, so this was an easy one to watch. This is another great trade that we've locked in this week! Lets look for the next move to catch.
Stay Safe - The JPI Team
Disclaimer
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