GBPUSD: Bearish Resistance Reversed Recent Bullish Recovery, Now Downtrend Accelerating Towards 1.5000
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 1.5180 around time of publication today.
Last time GBPUSD was reviewed in Ideas You Can Trade last month, a bullish support line was bringing prices higher - but the bearish resistance line (drawn in that prior post) had subsequently reversed the uptrend on February 26th- as that line proved to be a valid forecast of resistance.
Since reversing on that bearish resistance line GBPUSD has been resuming its bearish trend which has accelerated in recent days as USD strength is gaining. If this resuming bearish momentum continues its current path, the area of support near 1.5000 should be retested soon, whereas 1.5400 would need to be regained (or a break above the bearish resistance line that is still well above current prices) could enable a bullish reversal (but seems less likely for now).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5262 with a Limit to take profit @ 1.5350 and a stop-loss @ 1.5199 Risk/Reward Summary: Limit risk = 88 pips profit / (-63) Stop-loss risk = Gain to Loss ratio = 1.39
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5149 with a Limit to take profit @ 1.5101 and a stop-loss @ 1.5189 Risk/Reward Summary: Limit risk = 48 pips profit /(-40) Stop-loss risk = Gain to Loss Ratio = 1.20
Daily Candle Chart: