The GBP/USD pair on the M30 timeframe presents a potential selling opportunity due to the presence of a well-defined bearish flag pattern. This pattern often indicates a continuation of a downtrend following a brief period of consolidation.
Key Points:
Sell Entry: Consider entering a short position (selling) around the current price of 1.2618, positioned near the resistance line of the flag. This offers an entry point close to the perceived continuation of the downtrend.
Target Levels: Initial bearish targets lie at the following levels: 1.2556: This represents the height of the flag, measured from the top trendline to the bottom trendline, projected downwards from the breakout point. 1.2524: This is a further extension of the downside target, based on the height of the previous price movement before the flag formation.
Stop-Loss: To manage risk, place a stop-loss order above the resistance line of the flag, ideally around 1.2665. This helps limit potential losses if the price breaks above the flag pattern.
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Stronger US Dollar: The US Dollar has continued to gain strength recently, supported by: Hawkish signals from the Federal Reserve indicating potential for further interest rate hikes. Ongoing geopolitical tensions, which can increase demand for the safe-haven USD.
Weaker UK Economy: The UK is facing a potential recession, with concerns about slowing economic growth and rising inflation. This weakens the Pound