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Once again we show our favourite chart for the pound/dollar pair. And the rising channel that we built on it long ago. And which remains unchanged until now.
GBP/USD
What do we see on the chart? Last time we paid attention to the fact that the pound broke the upper boundary of the channel. And we noticed that from the technical point of view, such a breakdown is most often false. And so it happened this time. The British currency turned around, and correction to the lower line of the rising channel began.
The price almost touched this line on Tuesday morning, and then sharply reversed and moved up. Sellers, who were playing from the upper boundary of the channel, lost their nerve, and began to take profit. And buyers also lost their nerve, so they went back to entering long positions.
Is the correction completed? And will we see another movement to the upper part of the channel, with the targets around 1.45 in the pair GBP/USD? More likely yes than no.
What is the main risk of this scenario? It is that the upward movement within this channel on the daily charts has been going on for about 5 months. It is a very strong trend which only extremely lazy traders have not identified. And a lot of buyers joined this trend.
Yes, we remember our target for the Pound/Dollar pair of 1.5 by the end of the year. But after all, that date is still 9.5 months away. From the “evil market” point of view, of course, we want to break the channel with an abrupt move down, take off a lot of stops. And then turn around and go back up again in the opposite direction. That is why traders, especially those with big leverage going long, have to be extremely careful.
11.00 EU consumer price index for February
13.30 Canada Consumer Price Index for February
19.00 US Federal Reserve interest rate decision
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