Hello this is my take on GBPUSD. Given the broader bullish trend in GBP/USD, I believe a long trade is the best play right now, but I’ll be watching key technical levels and upcoming news events to time my entry properly.
Technical Indicators Supporting a Long Trade
Trend Confirmation:
The daily moving averages (EMA, MA, and TEMA) continue to show an upward trajectory, meaning GBP/USD remains in a solid bullish structure. The price is consistently trading above key averages, reinforcing the trend.
The Aroon Oscillator (AROONOSC) on the 4-hour chart is at 85.71, showing strong bullish control. This suggests upward momentum is likely to persist.
Momentum Indicators:
Relative Strength Index (RSI) on the daily timeframe is 76—this does suggest overbought conditions, but in a strong trend, RSI can stay elevated for long periods. Instead of treating this as a reversal signal, I take it as confirmation that buying pressure remains high.
Stochastic RSI (StochRSI) is also at 100 across multiple timeframes, indicating price exhaustion. While this could lead to a short-term pullback, it doesn’t necessarily mean a trend reversal—just that entering on a dip might provide a better price.
Volatility and Market Conditions:
Average True Range (ATR) is rising, meaning market volatility is picking up. This can be useful for timing entries—if I see a pullback within the rising ATR environment, it may be a good chance to enter before the next leg up.
Fundamental Factors to Watch
UK Employment Change (Feb) Beat Expectations:
The UK added 206K jobs, smashing the consensus forecast of 95K. A strong labor market fuels economic stability and consumer spending, which in turn supports the British Pound.
With employment data coming in hot, GBP could remain strong leading into the next major report.
Upcoming GBP Inflation Data (Apr 16):
UK inflation is forecast at 2.7% YoY for March, down slightly from 2.8%. If inflation remains stable or surprises higher, it could further support GBP, as traders anticipate possible moves from the Bank of England (BoE).
US Retail Sales and Powell’s Speech (Apr 16):
The US Retail Sales MoM is expected at 1.3%, but if it underperforms, it could signal weakening consumer demand and hurt the USD.
Fed Chair Powell’s speech could be a major volatility driver—if he hints at slower rate hikes or economic softness, USD could weaken, lifting GBP/USD higher.
US Jobless Claims (Apr 17):
Initial jobless claims forecast at 225K—if this number comes in higher, it might reinforce concerns about a weakening labor market and put more pressure on the Fed to ease policy.
My Trade Plan
Given all of this, I’m looking for a long entry but waiting for confirmation on the hourly chart before entering.
Ideal Entry:
If GBP/USD pulls back to 1.3180–1.3190, I’ll look for buying signals (such as bullish candlestick formations or divergence in momentum indicators).
If it breaks above 1.3245 with strong volume, that could confirm further upside, and I might enter on the breakout instead.
Final Thoughts
The uptrend is strong, but I don’t want to enter at the peak of an overbought rally. Instead, I’ll wait for a pullback or a breakout confirmation before committing to the trade. Additionally, I’m keeping an eye on how the UK inflation numbers and Powell’s speech shape market sentiment over the next 48 hours.
All signs point toward GBP/USD continuing higher, but patience will be key in timing the best entry.
Technical Indicators Supporting a Long Trade
Trend Confirmation:
The daily moving averages (EMA, MA, and TEMA) continue to show an upward trajectory, meaning GBP/USD remains in a solid bullish structure. The price is consistently trading above key averages, reinforcing the trend.
The Aroon Oscillator (AROONOSC) on the 4-hour chart is at 85.71, showing strong bullish control. This suggests upward momentum is likely to persist.
Momentum Indicators:
Relative Strength Index (RSI) on the daily timeframe is 76—this does suggest overbought conditions, but in a strong trend, RSI can stay elevated for long periods. Instead of treating this as a reversal signal, I take it as confirmation that buying pressure remains high.
Stochastic RSI (StochRSI) is also at 100 across multiple timeframes, indicating price exhaustion. While this could lead to a short-term pullback, it doesn’t necessarily mean a trend reversal—just that entering on a dip might provide a better price.
Volatility and Market Conditions:
Average True Range (ATR) is rising, meaning market volatility is picking up. This can be useful for timing entries—if I see a pullback within the rising ATR environment, it may be a good chance to enter before the next leg up.
Fundamental Factors to Watch
UK Employment Change (Feb) Beat Expectations:
The UK added 206K jobs, smashing the consensus forecast of 95K. A strong labor market fuels economic stability and consumer spending, which in turn supports the British Pound.
With employment data coming in hot, GBP could remain strong leading into the next major report.
Upcoming GBP Inflation Data (Apr 16):
UK inflation is forecast at 2.7% YoY for March, down slightly from 2.8%. If inflation remains stable or surprises higher, it could further support GBP, as traders anticipate possible moves from the Bank of England (BoE).
US Retail Sales and Powell’s Speech (Apr 16):
The US Retail Sales MoM is expected at 1.3%, but if it underperforms, it could signal weakening consumer demand and hurt the USD.
Fed Chair Powell’s speech could be a major volatility driver—if he hints at slower rate hikes or economic softness, USD could weaken, lifting GBP/USD higher.
US Jobless Claims (Apr 17):
Initial jobless claims forecast at 225K—if this number comes in higher, it might reinforce concerns about a weakening labor market and put more pressure on the Fed to ease policy.
My Trade Plan
Given all of this, I’m looking for a long entry but waiting for confirmation on the hourly chart before entering.
Ideal Entry:
If GBP/USD pulls back to 1.3180–1.3190, I’ll look for buying signals (such as bullish candlestick formations or divergence in momentum indicators).
If it breaks above 1.3245 with strong volume, that could confirm further upside, and I might enter on the breakout instead.
Final Thoughts
The uptrend is strong, but I don’t want to enter at the peak of an overbought rally. Instead, I’ll wait for a pullback or a breakout confirmation before committing to the trade. Additionally, I’m keeping an eye on how the UK inflation numbers and Powell’s speech shape market sentiment over the next 48 hours.
All signs point toward GBP/USD continuing higher, but patience will be key in timing the best entry.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.