GBPUSD: Resistance of 1.5400 May Turn Into Support, as Recovery From Last Month Continues To Lift Pair Higher
The daily candle chart below show the price history of the Great British Pound (GBP) versus the United States Dollar (USD). This currency pair is known as GBPUSD, and is trading near 1.5430 around time of publication today.
Last time GBPUSD was reviewed in Ideas You Can Trade in January, the trend was bearish and 1.50 was pierced and a breakout or reversal was expected.
Since then pair has recovered over 400 pips and ascended a short term bullish trend line (point 1 on daily chart below in aqua color), and appears to have hit resistance around 1.5400. However, that resistance line has been overcome and may turn into support to enable a continuation of the bullish recovery.
If 1.5400 is lost a downside continuation may gain speed as the very short term bearish channels point back towards 1.4800 in the medium term (for the lower support line) and the upper resistance line of those channels aims towards 1.5800. The longer term weekly chart below shows how the GBPUSD has regained the longer term bullish support line (point 3 in green on weekly chart below).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5451 with a Limit to take profit @ 1.5539 and a stop-loss @ 1.5399 Risk/Reward Summary: Limit risk = 88 pips profit / (-52) Stop-loss risk = Gain to Loss ratio = 1.69
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5398 with a Limit to take profit @ 1.5309 and a stop-loss @ 1.5439 Risk/Reward Summary: Limit risk = 89 pips profit /(-41) Stop-loss risk = Gain to Loss Ratio = 2.17
Daily Candle Chart:
Longer Term WEEKLY Candle Chart: