Forex Technical Analysis: Trend potential – Expecting a rally to 1.1758


Technical observation

GBP retraced to the resistance zone it established at 1.2316-1.2293 but could not break above it, instead it bounced below the zone and since then it has been trading with an increasing bearish bias. I expect a continuation of this downwards movement towards the supportive level 1.1758 followed by either a clear break below it with a big red candle, or a bounce at it. If you’re currently holding short positions with the pair above, remain in the trade with your take profit at 1.1758 and stop-loss at 1.2412. As it is on the 4 hour chart above, a surge to the upper side can only be expected in case of a clear break above the zone 1.2316-1.2293.

Trade recommendation

Remain short with your take profit at 1.1758.

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