GBPUSD: April High of 1.6840 Overcome as Bullish Momentum Pushes Above Resistance
The daily candle chart below shows the price history of the Great British Pound (GBP) versus the United States Dollar (USD). This pair is known as GBPUSD, and is trading near 1.6837 today after pushing above the April 17th high of 1.6840 earlier in the trading session still underway.
Resistance under1.6821 had been discussed as a barrier that held on several occasions in recent weeks, in the last post about GBPUSD in this series, and which failed today to contain the bullish momentum. Now that new highs have been made for the month, and for the first time since November 2009 (also discussed in the last post), the GBPUSD should continue to push higher.
If this breakout above resistance is short-lived, indicating that it was a false-breakout or just enough to trigger stops and orders to trade in the opposite direction - to either take profit or expecting a reversal - then the pair could return lower, and pivot before making another attempt at a higher price. However, either way the trend looks very bullish over the very short term, as fresh multi-year highs were reached today.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.6856 with a Limit to take profit @ 1.7044 and a stop-loss @ 1.6753 Risk/Reward Summary: Limit risk = +188 pips profit / (-103) Stop-loss risk = Gain to Loss ratio = 1.82
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.6748 with a Limit to take profit @ 1.6668 and a stop-loss @ 1.6813 Risk/Reward Summary: Limit risk = +80 pips profit /(-65) Stop-loss risk = Gain to Loss Ratio = 1.23
Daily candle chart: