The majority of the speculators are looking to short the Pound despite UK data been mostly positive in recent times, considering the Manufacturing Production (MoM), Unemployment Rate dropping to 4.9% in February and jobless claims edging up by only 10,100 in March – both showing the labour market's strength. In this regard, I am having a different perspective as the current set-up looks more to me!
Tendency: Uptrend ( )
Structure: Breakout | | Reversal pattern ( )
Observation: i. From a long term perspective on the Weekly chart, the Pound has been on a run since last year - 2020.
ii. After hitting a peak @ 1.42400 in Feb 2021, the price has gone through a Corrective phase that appears to find a bottom @ $1.36800 which is confirmed by the appearance of a pattern - a strong reversal set-up.
iii. Since hitting $1.36800 mid-April 2021, the price has continued to find a Higher High which later led to a Successful Breakout of Neckline @ $1.39000 before making a Correction during last week trading session.
iv. In this regard; I have spotted two windows for Buying opportunity (indicated on the chart as Buy window I & II) should price dip further.
v. To be on the safe side for a rally continuation, I shall advise that we look forward to buying above Neckline which is also a Key level ($1.39000) for expectations.
Trading plan: BUY confirmation with a minimum potential profit of 250 pips.
Potential Duration: 4 to 7days
NB: This speculation might be considered to make individual decisions on the lower timeframe.
Watch this space for updates as price action is been monitored.
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Past performance is not necessarily indicative of future results.