I discussed GBPUSD in this video on Monday and highlighted that as price was contained midway between two significant swings, price action was ambiguous but a market that warranted watching. If there was a slight bullish bias it is because we saw a Morning Star Reversal at 1.533 which resulted in a bullish break of a bearish, sloping resistance, which was then followed by a relatively calm retracement.
Yesterday's bullish close has this on my radar as I suspect the market has tipped its hand. The bullish close produced a Morning Star Reversal above the confluence of support to suggest a swing low has been seen at 1.5525. There is potential for this to become a Bullish Flag but I prefer not to trade those actual patterns as the entry choosing an entry level is particularly tricky and usually results in a significantly lower reward / risk ratio (assuming you don't get triggered into a fadeout).
Between 1.552-55 we have the 50 day MA and 38.2% retracement level. The swing low at 1.5525 produced a Spinning Top Doji with a narrow range, which warned of the pending weakness from the move down from 1.5674 highs.
Therefore if I am to assume the swing low at 1.5525 has been seen we can enter live at market, or wait for a break above yesterday's high with a buy-stop order. An alternative method I frequently use is to set a buy-limit within yesterday's range to catch a retracement which can increase reward to risk ratio if price then goes back up.
In terms of target there are no obvious levels looking at the price but the 61.8% projection (1.574) is around a previous congestion zone which is likely to act as a cushion of resistance if revisited. Alternatively we can assume a Bull Flag will develop and refer to the 100% projection around 1.587
GBPUSD: Market may have tipped its hand for a swing trade long
Since Monday's video I am satisfied we have seen a swing low and the near-term bias is now revised from 'ambiguous' to bullish.