GBPUSD - BUY - 28TH OCTOBER 2021 (Closed)

Good afternoon team,

A week or so ago we entered a long trade on the GBPUSD but was unfortunately stopped out at breakeven, however this would have been a great trade to the upside. The recent price action looks corrective in nature and appears to have setup another opportunity to enter on the long side. Fundamentally, the BoE appear to be a head of the rest of the market as traders are anticipating an interest rate hike from the BoE as soon as next month. Inflation has been running wild in the UK driven largely by the energy crisis. This is expected to get worse over the busy Christmas period with demand for retail, tech, and goods and services in general likely to increase. Rising interest rates will increase the strength of a currency, and the market will most likely price the rate hike in leading into the interest rate decision. The FED is not looking at raising rates until at least mid 2022, therefore an interest rate divergence is taking place, which should see the GBP continue a lot higher against the US dollar.

GBPUSD – 4 Hour Chart

The 5 wave structure is incomplete, we are looking to take the trade into the 1.39 resistance.

Trade setup: BUY market execution, current price 1.3744, stop loss 1.3659 and take profit 1.3890

Stop loss: 85 pips

Take profit: 146 pips

Trade Setup
BUY - Market Execution


Take Profit

Stop Loss