GBPUSD GBP Long Term Downtrend Now Broken
GBPUSD Sterling/Dollar Long Term Trend Change
GBP effectively double bottomed nearly a year ago now. Since then it's been travelling in channel whose
penultimate rally recoiled very precisely from the long term dynamic which has clipped all previous rallies back as
they rose to touch this powerful last line of bear defence. Below that line they have maintained control of the
medium to longer term. That line has now been broken. In classic fashion, GBP has now returned to test the same line
from above, currently giving it one last lingering caress before flying higher. It is a buy at current levels down to
1.3312 with stops below 1.3300 for small loss if wrong from here.
Upside target is 1.3832 minimum and 1.4043 maximum . So about 500 pips upside and 33 down. The market is in for a
surprise coming here, so long as the old long term resistance line can hold up as support over the next few hours. And even
if it breaks overnight it looks only likely to spike to a fleeting low at 1.3228 at very lowest as a result and will
then likely rally again. Look to buy GBP on any minor weakness with stops as above. If struck look to buy again
from 1.3260 with stop 40 pips lower still.
For this call to stay good the old long term dynamic must hold now...if it cannot be broken by bears today it's
showing us how strong it is before the rally outlined above begins. And even if it breaks lower, so long as it creates a
spike of buying interest which takes it back above the the long term dynamic quite quickly, then once again it is
showing underlying strength, not weakness. Buy dips until minimum target is reached 500 pips higher.
GBP effectively double bottomed nearly a year ago now. Since then it's been travelling in channel whose
penultimate rally recoiled very precisely from the long term dynamic which has clipped all previous rallies back as
they rose to touch this powerful last line of bear defence. Below that line they have maintained control of the
medium to longer term. That line has now been broken. In classic fashion, GBP has now returned to test the same line
from above, currently giving it one last lingering caress before flying higher. It is a buy at current levels down to
1.3312 with stops below 1.3300 for small loss if wrong from here.
Upside target is 1.3832 minimum and 1.4043 maximum . So about 500 pips upside and 33 down. The market is in for a
surprise coming here, so long as the old long term resistance line can hold up as support over the next few hours. And even
if it breaks overnight it looks only likely to spike to a fleeting low at 1.3228 at very lowest as a result and will
then likely rally again. Look to buy GBP on any minor weakness with stops as above. If struck look to buy again
from 1.3260 with stop 40 pips lower still.
For this call to stay good the old long term dynamic must hold now...if it cannot be broken by bears today it's
showing us how strong it is before the rally outlined above begins. And even if it breaks lower, so long as it creates a
spike of buying interest which takes it back above the the long term dynamic quite quickly, then once again it is
showing underlying strength, not weakness. Buy dips until minimum target is reached 500 pips higher.
Today's price action shows big spikes either side of current price, denoting uncertainty on both sides of this fight.
But GBP has stood strong as the Dollar surges...what is it likely to do when the Dollar stops? Sterling has spent all year defying the bears. By the look of the flag now forming that situation looks unlikely to change. Two strikes (another retest is fine if it happens soon) means that so long as the lower parallel continues to hold up today in the face of DXY strength GBP is a still a buy at these lower levels with stops below the parallel for small loss if wrong here. And if so, and the lower parallel of the flag does give way GBP will likely fall away to 1.3237-1.3223 and then bounce from there. As things stand though, GBP is showing underlying strength despite current weakness - and that will remain the case so long as the flag formation remains good