Published On: Thu, Mar 16th, 2017

Scope for mild dip to get long in GBPUSD

InstaForex

Background


USD Index

We finally get our USD breakout. Pushed through the expanding wedge formation to the downside. We now see some stalling in USD selling, but this should be merely profit-taking as the index moves down towards the neckline at 99.00

US dollar index – intraday wedge breakout  

Source: Saxo Bank

US dollar index daily – neckline target 

Source: Saxo Bank

GBPUSD opportunity

One major currency pair that could still offer an opportunity to get short of USD’s is GBPUSD (long trade).

GBPUSD monthly – Chance of a long-term base as we have moved higher from the Fibonacci confluence area at 1.1593-1.1392. 

Source: Saxo Bank

GBPUSD weekly – Bearish Elliott wave count (5 waves) now looks to be complete.Week of January 16 bullish outside week offers an upward bias. 

Source: Saxo Bank

GBPUSD daily – Looks to be forming a bullish reverse head-and-shoulders pattern. Yesterday’s Marabuzo level is seen at 1.2216. Neckline resistance at 1.2658 

Source: Saxo Bank

GBPUSD intraday (six-hour) – The choppy and prolonged pullback now looks to be complete at the Fibonacci confluence area of 1.2133-1.2124.

Source: Saxo Bank

GBPUSD intraday (30 minutes) – Completed the first 5 wave count to the upside. There is scope for a mild correction, but losses will be limited. Remember in the big picture (daily chart on GBPUSD and USD index) we are now in the impulsive third leg, which offers the least dips to buy into.  

Source: Saxo Bank

Trendline support seen at 1.2245. With a stop below the Marabuzo (1.2216), this offers a great long-term set-up

Management and risk description

Parameters

Entry: Buying GBPUSD close to 1.2245

Stop: below 1.2216 (1.2200 as this is also below the 50% pullback level)

Target: 1.2658. A break there and the measured move is 1.3410

Time horizon: medium term

— Edited by John Acher

Non-independent investment research disclaimer applies. Read more
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