Wednesday, July 1, 2020

Bullish Divergence On GBPUSD

Marco Tosoni

FХ Strategist & Financial Commentator

After setting a new historical bottom around 1.15 area in mid-March, a strong bullish rally started, culminating with a new top around 1.2800 area and followed by a bearish correction in the second half of June bringing the prices towards 1.2250 around last April bottom area, where we can detect a solid support zone.

The current week has started with a doji candle on Monday’s session, followed by a bullish marubozu candle set on yesterday, confirming the major support zone around 1.2250 area.

Looking at the RSI indicator we can now detect a perfect bullish divergence, that combined with the test of last April support zone, should anticipate the next rising swing. The Average True Range, on the other hand, is continually work around the 2019 levels, showing stability and this element should favour the pound during the coming weeks.

The bullish setup would be activated in case of a breakout of yesterday’s top around 1.2420 area, with a stop loss to place at 1.2220 below the weekly bottoms, while the target price could be expected nearby 1.2620 area close to the double top formation built on last April.

As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.

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