*Live market analysis with trading opportunities on the GBPUSD FX currency pair*
In this blog post I am going to show you my technical and fundamental analysis of the GBPUSD FX currency pair which is also commonly referred to as “Cable”. I am not currently entered in to any open trade positions on this financial instrument but I do believe it could present some good trading opportunities in the future.
As always, I use the TradingView platform for all my technical analysis. It really is very simple to use, contains all the functionality I need and more. Click on the link below to check out their website.
Let’s get right in to it and look at the higher timeframe, weekly price chart for GBPUSD.
I am looking at a few key points of analysis on the chart above. Firstly, price has once again found strong long term support at 1.20 and bounced from this support zone back late summer 2019. This is a good floor for price and buying at this level would have proved very fruitful for GBPUSD bullish traders.
Since then price made new higher highs at 1.35 which is around 120 pips higher than the previous weekly lower high that formed before price retested the 1.20 support zone. This indicates a good potential for the long term bearish trend to be reversing and for price to continue to make new higher highs throughout the next 12 months of trading and beyond.
Another good technical indicator of a bullish trend forming is that price is back above the weekly 50 EMA and is looking like it is going to bounce off of it this week. It is important to note that the 50 EMA still resides below the 200 EMA on these higher timeframes so that does indicate that the long term trend is technical bearish.
The daily chart shows a few potential trade setups for the future. The first and most obvious is to keep shorting the current bearish trend (see bearish trendline) to take price down to the next support zone at around 1.25.
All of my major support and resistance zones are shown on the chart with blue coloured boxes.
The daily timeframe (and intraday) is showing a near term bearish trend but I do believe that GBPUSD is a long term buy. If price breaks up through the bearish trendline to go back above the daily 50 EMA then I believe we should see price go on to make new weekly higher highs at 1.36 or above.
As you can see on the daily timeframe chart above, the 50 EMA is actually now above the 200 EMA showing a bullish directional alignment.
Another good potential trade sets up is to wait for price to form a strong daily or weekly higher low at the 1.25 support zone. This is a key psychological price level and would form a relatively clear inverse head and shoulder pattern on the GBPUSD price chart.
These are just 2 potential long term, higher timeframe trade entries. Once the overall long term directional bias is formed, you could always go to a lower timeframe (1hr or 4hr) and look for a high reward:risk intraday set up.
To learn more about high reward:risk ratio intraday trading, please check out my Mastering the Markets – Retail Trading Course.
GBPUSD Fundamental Analysis.
Brexit is done! We have finally left the EU and there is unlimited potential as to what could be achieved through various trade deals and fiscal policies over the next few months and years. This could lead to the UK and the Pound gaining significant strength if our government can do something great.
The counter currency for this FX currency pair is the US dollar. This week we saw the Fed cut rates by 0.50% which saw short term USD weakness increase. I believe there is a lot more room for them to cut rates further over the next few months and years so this should lead to more USD weakness which will in turn send the value of the GBPUSD rising.
To stay on top of market fundamentals and economic data, I like to use the DailyFX economic calendar which can be found by clicking on the link below. It is free to use and very helpful.
All my technical analysis is done using the TradingView platform. You can get access via the link below.
My preferred broker of choice is IC Markets. Low spreads and trading costs really help long term profitability. A link to their site is below.
FTMO Trader Funding Programme.
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DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.