Short term
Trade view / 23 February 2018 at 0:02 GMT

Watch for upside potential ahead for GBPUSD

Managing Director / Technical Research Limited
New Zealand
Instrument: GBPUSD
Price target: 1.4493
Market price: 1.3952

There was no economic data of significance on the UK calendar this week, but traders have kept in mind Bank of England hints that a rate hike is coming, sooner rather than later. But in the meantime USD is in the driver's seat of GBPUSD.

With the $258 billion of debt sales out of the way, there's not much data of interest out of the US today. The Fed's semi-annual monetary report to Congress will be released and Federal Open Market Committee member John Williams will speak on the economic outlook.

Management and risk description

Sterling displays a potentially developing one-month Inverse head & shoulders classical charting pattern (see Daily Chart below).

Support now lies at 1.3900/1.3860, and while this holds today, it enables a run at the key resistance level of 1.4080.

A sustained break of this resistance would be required to confirm Sterling’s reversal formation and herald a probable advance toward 1.4435 and then 1.4500 over the coming days or weeks.

Entry: Today, Sterling is seen as a Buy in the low 1.3900s.

Stop: just under 1.3860, initially.

Target: 1.4493.

Time horizon: allow up to several weeks.

Daily GBPUSD chart (click to expand).
GBPUSD  Daily Chart

Source: ThomsonReuters

Weekly GBPUSD chart (click to expand)GBPUSD  Weekly chart

Source: ThomsonReuters. Create your own charts with SaxoTrader; click here to learn more

For more on forex, click here.

— Edited by Robert Ryan

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Non-independent investment research disclaimer applies. Read more
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Treve Treve
another fantastic risk/reward trade max, love it!
Allied Allied
GDP was out yesterday 1.4% (miss) ?
Max McKegg Max McKegg
already discounted in market price
Allied Allied
wasn't sure if you had missed this or if GDP isn't significant anymore. Not saying I don't agree with the upside potential on this pair although my trust in BOE guidance is rather low.
Max McKegg Max McKegg
"Jamming" Stop to ensure small gain as short term structure on 1.3905 - 1.4005 form is inconclusive ...
marran marran
its heading the right way max, but do you still see it getting 1.4493?


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