Bullish outlook on the USD/GBP, primed for a breakout at 0.79626
(4hr time frame) On a consistent uptrend since the 25th of June, the USD/GBP tested the potential area of resistance at 0.79626 on 3rd July and is now consolidating under the above resistance level which might serve as a pre-breakout base through the level. Supported by an ascending triangle into resistance, there is confluence on the MACD indicator which does not register momentum divergence on the previous swing high. The 1 day time frame is also in an uptrend and supportive of a long trade.
Following volatility contraction over the past 5 or more candles, the market is primed for an explosive move shortly.
Fundamentally, given the deterioration of the UK economic backdrop over the past few days and the release of NFP in the US later today, probabilities favour the upside.
The plan is to go long with a stop loss of 1 ATR below the low of the pre-breakout base. Partial profits would be taken at the 1x risk level or higher depending on the explosiveness of the breakout. The remaining position would be closed once the market experiences a change in character.
Following volatility contraction over the past 5 or more candles, the market is primed for an explosive move shortly.
Fundamentally, given the deterioration of the UK economic backdrop over the past few days and the release of NFP in the US later today, probabilities favour the upside.
The plan is to go long with a stop loss of 1 ATR below the low of the pre-breakout base. Partial profits would be taken at the 1x risk level or higher depending on the explosiveness of the breakout. The remaining position would be closed once the market experiences a change in character.