GBP/USD stages bullish break, March peak in sight?
In the absence of an unexpected reacceleration in US inflationary pressures or unlikely hawkish pivot from Jerome Powell when he appears before lawmakers on Capitol Hill on Tuesday, whether the US dollar can reverse the bearish move seen last week is questionable. With Fed rate cut expectations growing as US data continues to soften, the path of least resistance looks lower in the near-term for the DXY.
Having broken above 1.2800 and closed there Friday, and successfully back tested the level again in early Asian trade today following the French election results, GBP/USD is one pair that may be able to capitalise on the buck’s bearish reversal in the days ahead.
Buying near these levels targeting the May high of 1.2894 is one potential setup, allowing for a stop loss order to be placed at 1.2790 for protection. You’re risking around 17 pips to make 87 pips. Resistance may be encountered around 1.2860, the high struck in June. Should GBP/USD fail to clear that level, consider taking profits on the trade.
While GBP/USD has not had a great track record above 1.2800, this bullish break comes with the USD on the backfoot and follows a successful break of downtrend resistance that thwarted other bullish moves earlier in the year. With it out of the way and momentum indicators like MACD and RSI providing bullish signals, upside looks easier than downside in the near-term.
DS
Having broken above 1.2800 and closed there Friday, and successfully back tested the level again in early Asian trade today following the French election results, GBP/USD is one pair that may be able to capitalise on the buck’s bearish reversal in the days ahead.
Buying near these levels targeting the May high of 1.2894 is one potential setup, allowing for a stop loss order to be placed at 1.2790 for protection. You’re risking around 17 pips to make 87 pips. Resistance may be encountered around 1.2860, the high struck in June. Should GBP/USD fail to clear that level, consider taking profits on the trade.
While GBP/USD has not had a great track record above 1.2800, this bullish break comes with the USD on the backfoot and follows a successful break of downtrend resistance that thwarted other bullish moves earlier in the year. With it out of the way and momentum indicators like MACD and RSI providing bullish signals, upside looks easier than downside in the near-term.
DS
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