July 28 2021
In my last blog about the GBP on the 20th of July, I mentioned that it was probably a market overreaction to assume that the spike in covid cases will derail the UK economy and that the GBP was oversold. That was at 1.3660. Well, 8 days later, here we are knocking on the door at 1.3900 again.
This is an example of when markets hit the panic button, it presents the opportunity for the cool heads amongst us to take advantage of excessive movement.
This is why I use point and figure charts to clearly show tops, bottoms, support, resistance, and reversals without the noise and emotion of time-based charts.
Take a look at the 20 pip GBPUSD Point & Figure Chart with a triple top at 1.3900. Then the breakdown of support at 1.3780 and the classic bottom patterns at 1.3580 and then 1.3600, followed by buy signals at 1.3640 triggering a reversal. 1.3780 was the initial reversal target, but once broken 1.3900 is back on the cards.
I love to trade the GBPUSD, it’s so much more fun than the mechanical EURUSD, which spent most of its time 30 pips on either side of 1.1800 for the past 2 weeks.
We may be close to resistance at 1.3900, but there are still GBP positives.
The panic about delta in the UK seems to have been an overreaction.
Pandemic experts are now reversing projections and thinking that by October the UK will really have covid under control. New daily covid cases peaked at 60,000 a week ago, and not the 100,000 or 200,000 expected. The latest numbers were down for the 6th day in a row at around 24,000. The high rate of vaccination has thankfully kept deaths extremely low.
This brighter outlook for the UK compares well with other countries still struggling with inadequate vaccination rates and lockdowns. I think you look to buy the dip for GBPAUD GBPUSD and sell into any EURGBP strength.
Learn to trade the GBP and You love it like I do! Please remember to practice risk management at all times. You can contact me at email@example.com