Last week, we noted a Shooting Star bearish reversal signal at the down-sloping resistance trend line. This shifted our bias to bearish on GBPUSD, looking for downside to 1.9730. Our analysis proved correct – GBPUSD declined to hit the target at 1.9730. Though profit/loss depends on where each trader entered the position, we opened short as of the printing of last week’s article at 1.9927 to book 197 pips in profit.
For this week, the pair does not show a clear candlestick signal as yet. Price action is currently testing 1.9690, a level that has acted as resistance in February and turned into support when price action penetrated above it. Our overall bias remains bearish. Should the close of today’s candle confirm a support break, we will look for continued downside targeting 1.9387.
GBP/USD Strategy
1. Short GBPUSD on a break of support at 1.9690
2. Set stop-loss jus above the recent wick high at 1.9843.
3. Set profit target near 1.9387, risking about 153 pips to gain 303.
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