If you’re looking for trend trades then you’ve come to the right place!
GBP/USD looks ready to bounce from an ascending channel support while the U.S. dollar just bounced lower from a resistance area.
Which setup will you more likely trade?
U.S. Dollar Index (DXY): 1-hour
Is the U.S. dollar ready for a longer-term reversal? The U.S. dollar index (DXY) just got rejected from the 102.75 zone, which lines up with an ascending channel resistance on the 1-hour time frame.
The rejection at the resistance opens the door to a retest of the channel support near the 102.15 area.
As you can see, the channel support is not too far from the 100 and 200 SMAs on the chart. In fact, it also looks like the 100 SMA is ready for a bullish crossover with the 200 SMA!
DXY hasn’t reached its trend line support yet, so y’all still have time to draft trading plans if you’re betting on a sustained uptrend for the dollar.
Of course, you can also take advantage of the current downswing and trade DXY’s move lower until we see more sustained buying pressure near lower inflection points.
GBP/USD: 4-hour
Swing traders huddle up!
Cable just bounced from the 1.2350 psychological level that lines up with the 4-hour chart’s 100 SMA and an ascending channel support that hasn’t been broken since late March.
How high can GBP/USD fly?
A long trade at current levels will still yield a good reward-to-risk ratio especially if you place your stops below the channel and aim for GBP/USD’s previous highs or new monthly highs.
Not convinced that GBP/USD can sustain its uptrend?
You can also place orders below the channel support and bet on a possible downside breakout.
Just make sure to use the appropriate volatility stops so that you don’t get caught in a fakeout!
