The good tone of the EU to the UK supports the GBP, where to look for entry

GBP/USD - The pair is in ascending channel after breaking key resistance levels. Given the strong impulse upward in recent days, entry with long of the current levels is extremely risky. What to do in this case? Taking into account the information we get from the indicators, the short-term adjustment is more likely. Dem (8) is spinning in an over purchasing zone, and Sequential counts 12 out of 13 possible to end the impulse. 50 and 200SMA are beaten, but the price is far from them, which also suggests that the GBP is in the overpurchase area. Price movement is close to resistance, internal diagonal - also negative signal for short-term correction. Once we have a good reason to believe that the GBP/USD will adjust, it is a good idea to wait for this adjustment to get the best possible price and to position ourselves with long-term trends. Long positions can be searched in the area between 1.3570 and 1.3600, where the price will meet a support level - Horizontal, diagonal, 50SMA and 23.6% Fibonacci correction of the last ascending wave.

SL is appropriate to put at levels around 1.3536 or lower.

Alternative Scenario: If the price goes back below the support area and stays there, the positive scenario will break and more likely to see a deep correction to the main diagonal of the trend.

Jr Trader Petar Milanov

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