GBPUSD Longs Favored Above 1.5540- Scalps Target May Highs
- GBPUSD responds to key support- broader outlook remains constructive
- Rebound approaching near-term resistance into 1.57
- Event Risk on TapThisWeek
Chart Created Using FXCM Marketscope 2.0
- GBPUSD holding within the confines of well-defined median-line formation- constructive
- Rebound off key support confluence keeps long bias in play
- Key support at 1.5497- bullish invalidation
- Interim resistance 1.5773 backed by key resistance into 1.5820/77
- Break below support targets 1.5190, 1.5040
- Momentum profile remains constructive- note pending support trigger
- Event Risk Ahead: U.S. Consumer Price Index (CPI) on Friday
Notes:The pound has reacted to a key support confluence just below the 1.54-handle with the rebound taking out the ML extending off last week’s highs. The broader trade remains constructive above this feature with our near-term bullish invalidation eyed at the highlighted region around the 1.5542 with a break sub 1.5497 (close basis) putting the short-side back into play.
Bottom line: we’ll favor buying pullbacks / resistance triggers while above the ML with a breach above upper MLP / 1.57 targeting subsequent topside resistance objectives into the 1.5877 barrier. A quarter of the daily ATR yields profit targets of 37-40 pips per scalp. Caution is warranted heading into tomorrow’s event risk with U.S. Inflation data likely to fuel added volatility in USD based pairs.
* It’s extremely important to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity on intra-day biases.
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Relevant Data Releases
Other Setups in Play:
- EURCAD Pullback Stalls at Support- Sub 1.3538 to Negate Bullish Bias
- Scalp Webinar: USD At Risk For Bearish Invalidation- 11,737 In Focus
- NZDJPY Rebound Testing Resistance- Scalps Target 89.50 Inflection Zone
- EURJPY at Risk Sub 135- Short Scalps Favored
---Written by Michael Boutros, Currency Strategist with DailyFX
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