GBP/USD broke above 38% Fibonacci

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GBP/USD broke above 38% Fibonacci

3:00 PM PM (EST) Update

GBP/USD Daily: Moving above the Ichimoku Cloud, the pair confirmed above 38% Fibonacci level

Trading Idea
GBP/USD confirmed above 38% Fibonacci . If you were following my previous signals, you should already have entered a bullish position towards 50% Fibo resistance level. If not, don’t worry, we could see a pullback before the pair continues its way up.

Technical and fundamental reasons why: Mr. British Pound has been on fire after the overwhelmingly positive UK general elections results. This has been so good that even the worse than expected data and the fact that BoE has cut its estimates for growth this year 2.5% from 2.9% didn’t really affect the overall new uptrend in the pair. Bank of England governor Carney announced Wednesday during the Asian session that they are not in a rush to cut interest rates.

With this, and 4 consecutive bullish candles on the daily charts, we could expect a minor setback for some short-term profit taking among weak speculators only in the market as a result of last week’s general election result, there’s little in the inflation outlook that would suggest that the Sterling rally is finished at these levels.

On the forex dance floor,  the pair has confirmed above the 38% Fibonacci level trading above the Ichimoku cloud. On the other hand, the RSI is heading up above oversold zone and the pair is also scratching the upper band of Bollinger Bands so we could see a reversal before the pair shoots back up.

Alternative Scenario: If the pair suddenly goes nuts and break below 1.5220 look for a reversal targeting 1.51 and 1.50 in extension.

Where to set your stops and limits:

Support Levels Turning Point Resistance Levels
1.51 1.54 1.56
1.50 1.52 1.5890