Key Support: 1.3615 – 1.3520 – 1.3440
The GBPUSD fell 3.60% (500 pips) last month (from high to low. From September lows we have seen an increase of 1.93% (258 pips) to retest the previous broken lows.
This move is a 76.4% pullback of the last impulse down and a 50% pullback of September’s range. A reversal is still not in play and price could definitely break above the 1.3675 since the short term structure is pretty much bullish. In the past 5 trading days, price has printed a new daily high.
We need to look at the USD for some direction here.
The DXY is still holding the previous broken highs on a retest (94.05) and the weekly pivot which gives me somewhat of a bullish bias. To really trigger this move the DXY needs to break with Friday’s highs which would trigger a bull flag breakout.
My idea is to trade this rally on a short position in the GBPUSD at the break of the short term structure.
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