GBP/USD: Looking bullish for now!
I predict GBPUSD to continue to rise until it reaches the strong resistance level at 1.5647. This upper Fibonacci retracement level acts as a strong resistance, and it is predicted to hold. The resistance was tested at least six times since midway through July, which gives it a much higher significance.
However, the DMI indicates that it is possible for -DMI to become dominant and result in a short trade. Although it is possible for this to happen, I think it will not trend for long and at 1.554 the price will rise again until reaching the resistance level at 1.564. This is further supported by the Uptrend-Neutral-Downtrend pattern which can be observed in the long term. The neutral period usually results in a consolidation between 1.554 and 1.564 for about 36 bars (8 days) in the first period, and 34 bars (7 days and 16 hours) in the second period. This suggests that the price may exhibit the same behavior after the uptrend.
If the pattern continues, then a strong downtrend would follow after a week, and it may even reverse direction at the support level at 1.5487. This 0.500 Fibonacci retracement level acts as a strong support. It was tested at least three times, giving it a much higher significance to the price's direction.
Overall, I predict the most sensible choice here is to go long now until price hits the resistance level at 1.564. If the resistance holds, the price may or may not consolidate for a week, but either way a downtrend would occur.
However, the DMI indicates that it is possible for -DMI to become dominant and result in a short trade. Although it is possible for this to happen, I think it will not trend for long and at 1.554 the price will rise again until reaching the resistance level at 1.564. This is further supported by the Uptrend-Neutral-Downtrend pattern which can be observed in the long term. The neutral period usually results in a consolidation between 1.554 and 1.564 for about 36 bars (8 days) in the first period, and 34 bars (7 days and 16 hours) in the second period. This suggests that the price may exhibit the same behavior after the uptrend.
If the pattern continues, then a strong downtrend would follow after a week, and it may even reverse direction at the support level at 1.5487. This 0.500 Fibonacci retracement level acts as a strong support. It was tested at least three times, giving it a much higher significance to the price's direction.
Overall, I predict the most sensible choice here is to go long now until price hits the resistance level at 1.564. If the resistance holds, the price may or may not consolidate for a week, but either way a downtrend would occur.
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