Price Analysis of British Pound, GBP, GBP / USD:
- The US dollar has put in a very strong push from Thursday’s lows – and for traders looking to soften that move, the long side of GBP / USD can be attractive.
- USD– weakness has been a dominant theme in the markets since last March – and the latter part of last week brought a countertrend to this theme. But given the timing, it could be month-end feeds, so for those looking for bearish themes on the USD, GBP/ USD may remain attractive.
- The analysis contained in the article is based on Price action and graphic training. To learn more about price action or chart patterns, check out our DailyFX Education section.
The pound sterling has had a very strong start to the year so far, even as the country continues to face economic pressures from the foreclosure. But, the pace of vaccine rollout has been encouraging, especially when compared to mainland Europe, and this has helped spark some optimism across the pound sterling.
Against the US dollar, the British pound exploded last week on a launch above the psychological level of 1.4000. And the bulls didn’t stop there either, as buyers continued to push up to 1.4243, where price action started to pull back ahead of the psychological level of 4250.
Since hitting that new high last Thursday, prices have retreated, finally finding some support around the 1.3900 level. This has so far helped stabilize price action, leaving the door open for further bullish scenarios in the pair.
What makes this setup so interesting is how well the uptrend has established itself since the end of September, as can be seen below in the trend channel that has held most of the price action. over the past few months.
GBP / USD Daily Price Chart
Moving down to a shorter chart, we can see the buyers looking for support around this 1.3900 level. This may keep the door open for further bullish scenarios for trend-based strategies, seeking prices to return to a new test of the psychological level of 1.4000.
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Check out our GBP guide
Two-hour GBP / USD price chart
Graphic prepared by James stanley; GBPUSD on Tradingview
— Written by James stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX