Sterling has been blasted lower after BoE governor Carney cast doubt on a previously pretty-much-expected UK May rate hike. The EU's rejection of Britain's latest Brexit-Irish border plan only served to deepen the rot.
Day trade
Trade view / 10 August 2016 at 9:09 GMT

Bias turns bullish in GBPUSD as correction completes

Analyst / PIA First
United Kingdom
Instrument: GBPUSD
Price target:
Market price:

Using correlation and chart formations ,GBPUSD looks be bullish today. Either buying a dip or break holds solid risk/reward trades. 

Please see yesterday’s reports for our view on EURGBP.

Monthly – Longer timeframes, and there is no indication that the trend is changing. At the moment, all price action this month is inside September's bearish range. Support is seen at 1.2673 and 1.1590.

No indication that the GBPUSD trend is changing from the monthly chart
Source: Saxo Bank

Daily – We have seen mixed and volatile price action for the last 32 (trading) days. Channel support is seen at 1.2954, close to yesterday’s low. 

Volatile action in the last month as the daily chart showsGBPUSD D
Source: Saxo Bank 

Four hour – We have completed a corrective AB=CD formation after a five-wave bullish count (Elliott wave). This would suggest the the next upward wave should now come underway.

This could also be seen as a possible right shoulder in a bullish reverse Head and Shoulders pattern offering a very good risk/reward trade.

A bullish wave on the way?
 Source: Saxo Bank

30 minutes (intraday) – Even the intraday chart highlights a possible bullish head-and-shoulders pattern. The prime long entry is 1.3015.

Head-and-shoulders pattern possibly emerging
Source: Saxo Bank 

Management and risk description

A break of 1.3405 would confirm the head-and-shoulders breakout.


Entry: long 1 unit at 1.3046 and will buy again at 1.3015.

Stop: 1.2995.

Target: intraday 1.3225. AB=CD formation at 1.3638 (1.3660 would close the gap left open on June 24). Head and shoulders would be 1.4150.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
Allied Allied
Is this trade stopped out?
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am still in .... more luck than judgement. Didn't set my stop


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