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GBPUSD close to a major sell signal

The rollercoaster ride for USD continues. For a few weeks, the USD was gaining strength. Then we got a proper bearish correction and many traders thought that the good times for the USD were over. The new week, however, has started with renewed demand for the greenback.

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We’re very close to a major sell signal on the cable. Our negative outlook comes from the fact that the price bounced from the 38.2% Fibonacci and created a symmetric triangle pattern (black). In this case, it looks like this is a trend continuation pattern, which should result in a breakout of its lower line. Some may say that the triangle is also a head and shoulders pattern, and to be honest with you, we will not argue with that. A proper sell signal will be triggered when the price closes the day below the lower black line. The chances of that are quite significant.

In the event of a breakout, we’ll be targeting the lows from August. That gives us a great risk-to-reward ratio. From a practical point of view, the Stop Loss can be placed above today’s daily highs, which makes the potential profit three times higher than the potential loss.


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