Where Do We Go From Here- GBPUSD

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The GBPUSD has offered some nice upside action recently but, that may soon be changing…

Before we talk about that, let's look at the upside opportunities that developed over the past two days.

Looking at the hourly chart, below, you'll see that from August, 29 to August, 31 the GBPUSD was going sideways. Now, going sideways is not as important as understanding where it was happening.

Once you understand that, it is easy to establish a bias on the future direction of price.

In this case, the GBPUSD broke out and, after pulling back, found support and then began to move back up.

If you were prepared, you could have bought the breakout and enjoyed the run up over the last day and half.

Now, you could just use the hourly chart (or any timeframe for that matter) and trade from it but, if you combine it with at least one higher timeframe, in this case the daily, you can increase your odds of a successful trade.

So, looking at the daily chart from August 29-31, where was price?

Support!

That tells us to have a bullish bias. And, when you combine that with the consolidation on the hourly chart, it presents a compelling case to look at getting long.

It then becomes our job to find a low risk, high quality entry. That came in the form of either the first or second breakout on the hourly chart.

Fast forward to what is happening right now.

The GBPUSD has enjoyed a couple days of strength but is now into a resistance zone.

When we combine the recent move up into resistance with the longer term downtrend that GBPUSD has been in, this is a level that I would be looking for sellers to show up.

Over the coming days I will be looking for GBPUSD to move back towards the bottom of the range.

If it gets there, I will then look for it to break the lows and accelerate down.

On the other hand, if GBPUSD is able to break out above the top of the resistance zone, it will have a ton of upside potential as it moves into the void left by the Brexit vote.

I will be doing free webinar next Thursday, September 8. Come join me and we'll review this analysis, see where price went, and much more!