Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade idea of the Free Profitable Forex Newsletter!
GBPUSD has been smashing higher and higher in recent weeks, and this week it is challenging the 1.35 resistance. The main drivers behind the GBPUSD uptrend are positive Brexit sentiment and a general decline in the US dollar.
While there have been both positive and negative comments on the Brexit trade negotiations from officials in recent days, the latest briefings from today suggest a deal is almost done. An EU official was quoted saying, “UK Trade Deal “Imminent”, “Expected By The End Of The Weekend Barring Last-Minute Breakdown In Talks”. In the meantime, GBPUSD maintained the uptrend, despite negative Brexit headlines as recently
as yesterday, such as French officials saying France will veto any deal that is not good enough for France. This clearly shows the market is expecting that the catastrophic no-deal scenario will be avoided, and at least some form of a deal will be done before December 31.
The other factor supporting Cable higher is a broadly weakening dollar. This should act as a tailwind for GBPUSD and help sterling strengthen more against the dollar than it would versus other currencies. A combination of a positive Brexit resolution with a deal and a continuation of the USD bear trend should easily take GBPUSD toward 1.38 in the coming trading days. That may happen as soon as next week.
GBPUSD Technicals: Bullish Momentum Is Strong
Trading is volatile this week, with several large swings between highs and the lows already having taken place. Still, the fact that the price is recording higher highs and higher lows is indicative that the bullish trend is intact.
The bullish move was pushed down on Wednesday, taking GBPUSD to reach the 1.33 area. But then, the bearish attempt was reversed there, and the pair moved to a new high close to the 1.35 level. While a bullish breakout is not yet confirmed, the price action suggests that it is likely to occur.
As we said earlier, the bullish trend here is also in line with the broad USD downtrend. This is why GBPUSD seems like the best cross to express bullish GBP views at present. The pair should have decent upside potential on a “likely” Brexit deal being struck.
The 1.3285 lows that were set on November 27 and December 2 should hold for the bullish sentiment to remain intact. Moreover, it will be even better if the 1.34 former resistance zone holds.
With that said, we should be looking to join the trend either around current levels or potentially on a breakout above 1.35, which is likely to come once there is official confirmation that a Brexit deal has been done. Reports suggested that will likely happen before the end of the weekend.
The risk with waiting for a move above 1.35 is that it can happen quite fast, and we may miss a big part of it. The risk of entering earlier is, of course, the possibility of disappointment and a downside reversal in case no deal is made.
Entry:
- Look to enter long around current levels (1.3480); or
- lower if possible, if a volatile spike will take the price down;
- the optimal area for entry is around the 1.34 prior resistance that is now support
Stop:
- 1st below the 1.34 price zone
- 2nd below the 1.33 area; especially GBPUSD shouldn’t break the 3285 lows and stay below them
Target:
Trade signals from the past week
TOTAL: N/A in the past week
TOTAL: +3160 pips profit since October 1, 2018
If you have any questions or feedback, don't hesitate to reply to this email.
Thank you!
High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
|
|
|
|
