GBPUSD: 1.6800 Within Reach Again As Pair Nudges Higher as Week Comes To A Close
The daily candle chart below shows the price history of the Great British Pound (GBP) versus the United States Dollar (USD), known as the GBPUSD pair, and currently trading near 1.6745 (as of publication), after nudging higher in today's trading session which is about to come to a close for the last week of February.
Earlier in the month, we had wrote about the GBPUSD in the Ideas You Can Trade series, when support was needed to avert a drop, since then the pair recoverd and the upwards momentum of recent months could be resuming if previous highs above 1.6800 can be overcome.
The high of 1.6821 on February 17th could act as a barrier, or as resistance to further upside, whereas if this level is breached, GBPUSD could trade closer towards 1.6950 and hit under a medium term bullish channel (point 4 in green on chart) that has provided bullish resistance to the medium term uptrend.
If support fails and the pair heads lower, the short term bearish trend lines (point 9 in magenta, and point 6 in yellow) could provide direction back to the 0% Fibonacci line that last helped the pair recover back to current levels - something that may be repeated - if this line is tested again (near 1.6250).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.6823 with a Limit to take profit @ 1.6916 and a stop-loss @ 1.6788 Risk/Reward Summary: Limit risk = +93 pips profit / (-35) Stop-loss risk = Gain to Loss ratio = 2.65
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.6568 with a Limit to take profit @ 1.6460 and a stop-loss @ 1.6619 Risk/Reward Summary: Limit risk = +108 pips profit / (-51) Stop-loss risk = Gain to Loss Ratio = 2.11
Daily candle chart: