There’s a lot of split decisions on Sterling at the moment, particularly due to Britain’s depart from the European Union.
Here’s my technical view.
It’s obvious that the bears have been losing their steam for over 6 months now. GU had been consolidating in a 780 pip range for almost half a year before we saw an impressive move higher in May, completely violating the weekly resistance level of 1.2750.
The M.As are currently converging, if we see a crossover this could be the beginning of a major trend reversal.
After forming a double bottom off the 1.2000 level (psychological barrier), price has shifted its momentum to the upside, retracing into a Fibonacci level before continuing its climb. Last week we saw a bear candle and the week closed out just below 1.3000. This wasn’t too unexpected, as there would have been a lot of retail traders opening long positions as result of the prior week’s close, price was forced down into a probable huge pool of liquidity. Nevertheless, this is something to be wary about when looking for buying opportunities.
There isn’t much to go into detail about here, price is making Higher Highs and Higher Lows, with the most recent pullback being a retest of the broken monthly level. My bullish sentiment will remain unless I see a clean break of the daily trend-line.
Here is an opportunity that is currently available on the H4 time-frame.
Here is the possible case for entry:
- Possible 3rd touch of TL
- 61.8% Fibonacci retracement
- M.A Cross
- C.T.L break
- Break and close above 1.3000 (H4).