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GBP/USD Pushes to New 2017 Highs

GBP/USD Pushes to New 2017 Highs

Walker England, Forex Trading Instructor

Talking Points:

  • GBP/USD Trades to New 2017 Highs
  • Sentiment Figures Remain Negative at -1.26
  • Looking for more trade ideas for Pound and other currencies? Register for our Q2 price forecast HERE.

The GBP/USD is breaking out to new 2017 yearly highs this morning, extending its rally above the key 1.2900 handle. Technically today’s move should be seen as significant, as the pair has now concluded a 5 day period of consolidation by breaking out above the previous high at 1.2906. If prices continue to rally, bullish traders will next look for the GBP/USD to test the September 2016 swing high found at 1.3445.

In the event that the GBP/USD begins to reverse lower in the short term, traders may look for the pair to first trade below the 10 day EMA (exponential moving average) at 1.2769. This line is acting as an ascending value of support, and a breakout below 1.2782 may suggest a shift in the pair’s short term trend. In this bearish scenario, traders may again look to target the 200 day MVA (simple moving average), which is found at 1.2514.

GBP/USD, Daily Chart & Averages

(Created Using IG Charts)

How can market sentiment be worked into your active trading strategy? Get our Free sentiment guide here.

Traders should also note that sentiment figures for the GBP/USD currently remain negative. Currently IG Client Sentiment totals read at -1.26, with 44% of traders long the GBP/USD. While this value is not considered extreme, this negative figure does suggest that the pair may continue to rise. In the event of a strong bullish breakout to new highs, traders should look for sentiment figures to move towards negative extremes of -2.0 or more. Alternatively if the GBP/USD retraces lower, it should be expected to see sentiment figures neutralize and potentially flip to a positive reading.

--- Written by Walker, Analyst for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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