With GBP still bullish and it is pounding its way up.
I could see a potential cypher pattern in the making for the pair.
With this pattern we could see a reversal pattern that will form a leg 4.
What do you think?
GBP is going towards the retest of the previous high at 1.42.
But the real test of resistance is at 1.43.
Chart structure suggest, GBP_USD have the same structure of EUR_USD in the past as part of my back testing. (see comparison)
Don't miss the multiple trades in the coming day and weeks.
GBP_USD, if my analysis is correct, if the daily candle shows a bullish pin bar towards 1.28, then the next action will be strong sell at the top with target profit at 1.2468 level based on fib retracement between 0.5 and 0.6.
Strong resistance will dump and sell the pound, with the formation of M is now on the way.
Setup the sell-limit at the resistance level, with 3.8 risk reward ratio, just be careful of setting the stop loss otherwise no stop loss.
WIth targets between 0.5 and 0.6 fib retracement creating the B leg of the prospect ABC or ABCE pattern.
Change of Trading Strategy.
Structure suggest that the pound is to go for a break-out.
A number of patterns can be seen on a 4H and Daily Chart.
1. Bullish Flag Pattern
2. Head & Shoulder Pattern
3. ABC pattern
Back tested GBP_USD on a 2009 historical data.
1. 2009 Oct Data show a strong impulse move right after the pound crash.
2. 2020 Apr Data shows a similar strong impulse
Here is comparison chart between current and previous chart patterns.
Current level is on the middle of nowhere but could trigger trade set-up once it goes to the main resistance level.