Monday, May 14, 2018

I Expect A Bullish GBP/USD Correction

GBP/USD broke out below the trend line of the upward channel that formed from 1.19914 - 1.43762 and the main trend is bearish for the moment.

Despite that the pair reached a strong support at 1.3420 on the W1 time frame and the bar that formed above that support is a signal for a possible bullish correction.

On the D1 time frame there are bars which confirm the expectation for a corrective rally. The priority scenario is here is for a rally for the pair to test the breakout – i.e. a rally to 1.3720 – 1.3750, after which we could expect a renewal of the downward movement to 1.3200 – 1.3150.

The alternative scenario is for a direct depreciation toward 1.3200 – 1.3150 but at the moment that appears less probable.