GBPUSD Set to Explode Higher
Currencies / British Pound Sep 17, 2018 - 09:42 AM GMTBy: Austin_Galt
Pattern – we can see price bottomed out at 1.2662 and has subsequently made a pattern of higher highs and higher lows. The recent higher low formed a bullish double bottom, denoted by the horizontal line. Double bottoms which form just above the major low are generally an excellent indication of a new uptrend in play. I now expect price to do some backing and filling before launching higher again.
Daily Chart
Bollinger Bands – price is at the upper band and I am looking for resistance to come in and send it back to the lower band for the next higher low.
Fibonacci – the double bottom was at retroactive support from the 76.4% retracement level so I believe we should now be looking at the next level of support being the 61.8% retracement level at 1.2846. And, as per usual, I like to see this level given a test so perhaps price can nudge marginally below before turning back up. The 76.4% angle looks a prime target.
RSI – strong.
Weekly Chart
Pattern – the final leg of the bear rally that started in 2016 looks to have just commenced the final phase. This should be the most explosive leg.
Bollinger Bands – price is at the middle band and I expect some temporary resistance around here before heading north once again.
Fibonacci – this fan uses the first high as the end point and the low was bang on support from the 76.4% angle while clipping the 61.8% retracement level. Nice. I am now looking for price to surge higher and eventually top out at resistance from the 23.6% angle. If not, the 38.2% angle. Let’s see.
Horizontal line – denotes the price where price plunged after the Brexit vote and I expect price to trade back to that region.
Moving averages – in a bearish position which adds confidence that this is a bear rally only.
RSI – strong.
Summing up – after a small correction in the coming days, I expect price to surge higher and eventually top out above the 1.50 level.
By Austin Galt
Austin Galt has previously worked as a stockbroker and investment banker while studying technical analysis for over two decades. He is also the author of the book White Night: A Colombian Odyssey
Email - info@thevoodooanalyst.com
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