Top-down trading analysis. GBPUSD an upside reversal
In this article, we will share a top-down trading technical analysis for the GBPUSD and a view on a GBPJPY.
On the monthly GBPUSD chart, we can see that the pair is in the long-term Pitchfork downtrend channel and is almost reaching the important long-term uptrend resistance 1.3600 level.
On the weekly chart, we can see the important long-term falling trendline 1.3100 level strong breakout. This level was not broken to the upside from April 2018 despite numerous price action spikes.
By using our top-down trading technical analysis we have identified the key levels which will be your triggers for a trading strategy in this instrument after an important upside break of the strong resistance. Preferred entry is long, upon a possible pullback into the gap with the stop loss below the near-term uptrend resistance break 1.3100 level. Take profit target is 1.3600 level at least.
GBPJPY is in the same market structure as GBPUSD but with a stronger price action magnitude. Preferred entry, for now, for GBPJPY is long but after the larger pullback taking into account its correlation with Stock Indices. A possibly better solution for “cable” traders is GBPUSD.
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Happy trading! (click on the chart to enlarge it)
