The main trading day of the week is Wednesday. The US CPI figures and the BOE monetary policy are expected to be released.
GBPSUD is likely to be the most volatile currency pair. In our FX intraday strategy we are focusing on GBPUSD.
You may refer to the charts below or replicate the setup in your trading platform.
We are focusing on GBPUSD, click on the chart to enlarge.
GBPUSD Intraday Strategy
GBPUSD 4hr chart offers a deeper insight into how events may unfold. The first notable part is the immediate support at 1.2400.
It is challenging to determine whether the support will indeed hold if tested. The fact the price has found some support. it does not necessary suggest it will hold.
1.2345 (approx.) is the more attractive price level. Upon a successful re-test (a 4hr close is often required) of 1.2345, which may see some gains towards 1.2500 initially.
In an event 1.2345 gives way, the latter support is seen around 1.2270 and 1.2190.
A successful re-test of 1.2270 may trigger some corrective gains, targeting 1.2400.
If 1.2190 is tested, 1.2270 is potential target for a bullish retracement. The key resistance lies at 1.2505. A firm 4hr close above 1.2505 may pave the way for further gains towards 1.2640.
We we are aware the market reaction to both the US CPI figures and BOE monetary policy may be aggressive, it is possible the price will break above 1.2505 (in an event of a bearish USD or bullish GBP) and extend its gains towards 1.2640.
The risk of solely initiating a long trade following a break above 1.2505 (meaning, only based on the breakout) is fairly high.
All of the above is focusing on long GBPUSD trades. For short positions, the price will require to post a 4hr close below 1.2345 yet above 1.2310 (approx.).
A re-test of the breached support (focus on the blue line) is required. A 4hr close may not necessarily be required, however, observing the hourly chart for a firmer signal may be needed to time the entry.
The potential targets are 1.2270 and 1.2190.
It is possible the intraday strategy may kick into play as early as Monday or Tuesday.
GBPUSD Intraday Update
GBPUSD kicked into play as 1.2345 was tested by the market.
The re-test triggered corrective gains in GBPUSD, obtaining its first technical target ahead of the BOE monetary policy.
As the intraday strategy has already kicked into play, it is now accessible to all traders.
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