Why is the pound rallying?

“Analyse your trade setups before even considering taking any trades”

This week has been very exciting with some great winning trades and we hope you’ve been taking advantage of the market analysis and signals we have been providing. So far this week, we’ve had several great trades totalling 1346 pips!

* USDCHF Sell at 0.9740 hit Target 2 at 0.9610
* USDJPY Sell at 100.95 hit Target 1 at 100.10
* NZDUSD Buy at 0.7207 hit Target 1 at 0.7260
* GOLD Buy at 1346.00 hit Target 1 at 1354.00
* GBPAUD Buy at 1.6950 hit Target 1 at 1.7140
* GBPNZD Buy at 1.7930 hit Target 1 at 1.8000
* USDCAD Sell at 1.2878 hit Target 1 at 1.2800

Plus… you may recall on Tuesday, we said;


“Currently, we’re closely watching the GBPUSD. We mentioned yesterday that a rebound of sterling is probable at these oversold levels, and we already see a 1 hour upward trend occurring, so in the next 4-8 hours, we’re going to confirm if it holds and look for strong upward signs on the 4 hour time-frame before entering. We’re also looking at some sterling crosses that have attracted our interest representing low-risk/high-reward trade opportunities.”

As you can see above, two sterling crosses were successful with the GBPAUD still running… so what happened with the GBPUSD?

Well, we issued a Buy trade at 1.3040 and it hit Target 1 and is currently 140 pips up at 1.3180 and in reach of Target 2. We are maintaining our bullish view of the pound at this current time and we believe that there is plenty more correction possible in this currency.

So, why is it rallying? Put simply, it’s heavily oversold. You can look into it further and come up with other reasons like; retail sales (month to month) came out significantly better than expected earlier this week… but this data is not a huge market mover normally and as technical traders, we usually see signs in the market a lot sooner than any news event comes out.

What we were looking at was the 1.2801 Macro Level that would act as a key support. Price got within 64 pips of this level and then started rallying in a 1 hour uptrend. Once the pair developed into a 4 hour uptrend, it became the 1st technical change in trend since the 4th of August and so, we believed it to be a good trade to enter into. It’s now consolidating above the 1.3120 Macro Level and we believe that as long as price remains and closes above this level on the 4 hour, we could very likely see a resumption of the move upward onto the 1.3323 level and then onto the 1.3502 level. However, the market can change quickly and behave erratically so it’s prudent to lock-in profits if this move eventuates.

There are plenty of new opportunities in the markets every week and rather than watch the news (the “History Channel”), join us by taking advantage of technical trade setups that generate “the moves that make the news” today.

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