Another GBP/USD Breakout?

As I mentioned in my GBP/USD trade early this week, I’m still fundamentally bullish on the pound.

And now that the Fed has communicated its policy plans, I feel that there’s even more reason to buy Cable. While Carney and other top BOE officials are hinting of rate hikes this year, Janet Yellen and her gang are sticking to the program and are not even interested in rate hikes in the foreseeable future. Heck, they even DOWNgraded Uncle Sam’s 2014 growth forecasts!

GBP/USD 4-Hour Forex Chart

GBP/USD 4-Hour Forex Chart

This is why I bought GBP/USD at the first opportunity that I got. I was watching the 4-hour chart and bought as soon as a green candle closed above the 1.7000 major psychological handle. I risked 0.50% of my account at 1.7030 and placed a 100-pip stop on two 0.25% positions.

I’m watching this pair closely for signs of end-of-week reversals but for now the plan is to hold on to my positions until there’s a catalyst that would invalidate my fundamental bias.

What do you think? Are we seeing another breakout or is GBP/USD not yet ready to break above the major psychological area?

P.S. You can contact me via @LoonieAdventure on Twitter and the Loonie Adventures Facebook page if you’re having trouble commenting.

Thanks and have a great trading day! :)

Huck

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