Cable escapes rectangle to upside
06 April 2023
The currency that’s been doing pretty great in the past few days is definitely the British Pound. In today’s analysis of the GBPUSD we have a handsome signal to buy. The last time we analyzed the Cable here was at the beginning of February. Back then, we were pessimistic, forecasting a decline. This is how we concluded the previous piece:
“The price breaking the blue up-trendline would give us a sell signal towards the area (purple) of the Fibos – 23.6% retracement of the bullish correction and 38,2% retracement of the main downtrend. The chances that we will get there are quite high…”
After those words were written, the Cable was decreasing gradually almost every day, reaching its long-term low on March 8. We are talking about an approximate 350-pip drop here, so I guess even the long-term traders were satisfied. Since reaching that low, the Cable bounced and the price created a long-term rectangle, locked between a horizontal resistance at 1.24 (yellow) and support at 1.186 (orange).
The reason we are meeting here again and talking about the GBPUSD is that on Tuesday, the Cable broke the horizontal resistance and set new, long-term highs. An escape from the rectangle to the upside effectively triggers the buy signal.