GBPUSD may find support between 1.3180 to 1.3130 due to a confluence of technical levels. Brexit optimism had earlier lifted GBPUSD to 1.3340 levels after which profit taking has given a good retracement.
We are biased towards being long on GBP due to decreased chances of No-Deal/Hard Brexit. Brexit delay (atleast till June) or some deal looks most likely now - UK voting next week may again take GBP higher.
Phibase team has setup an automated script to long trades in the support zone which offers good risk reward of 1:2 (100 pips : 200 pips). The level 1.3100 provides a stoploss level for the long at PZR.
- Symbol : GBPUSD or GBPJPY LONG
- GBPJPY may provide better gains/moves since USD is currently stronger.
- Analysis time frame : H1
- Original Recommendation Date : 04 March 2019
- Technical Levels : Trendline, Channel, Fib and Moving Average Support levels
- Potential Reversal Zone : 1.3180 to 1.3130
- Target Price : 13400
- Stoploss : 100 pips or below 1.3100 which ever is lower
- Risk:Reward = 1:2 (-100 pips: +200 pips)
At this stage, Brexit can have two out comes : 1) May’s Deal passes and 2) Long Extension of 1 year – Both the outcomes are GBP positive. No Deal Brexit is highly unlikely and is not being priced in – this is the only risk and both UK and EU will do whatever is required to avoid this. As of now Even UK’s PM has only her deal or no/slow Brexit on the table – No Deal threats are seen as only postering to force MPs to back the deal.
Phibase technical and fundamental analysis has GBP price target gapping up by about 300 to 400 pips anytime during the Brexit event on any positive headline – We are currently taking long positions when the most recent strong support level is protecting the SL which is set at about -100 pips. It will not be possible to enter trade after confirmation of breakout since the volatility will be very high. Both INDEX and our Technical Trades are best suited for trading GBP (USD or JPY) pairs. The choppiness does result in SL hits but this is mainly to protect account against adverse movements which may put account at risk. Taking GBPUSD long position at major support level between 1.3200 to 1.3000 or GBPJPY long position when GBPUSD is at those support levels has high probability of reaching 400 to 600 pip targets.