Forex Setup: GBP/USD’s Rising Channel

I think I found a long GBP/USD opportunity. What do you think of this forex setup?

As Big Pippin pointed out in his Daily Chart Art today, GBP/USD is sporting a nice bullish divergence on the 1-hour time frame. What’s more, it’s also near a rising channel support that’s been valid since the start of the month!

GBP/USD 1-Hour Forex Chart

GBP/USD 1-Hour Forex Chart

Fundamentally I’m comfortable buying the pound. Though the dollar is the king of the hill right now, the pound isn’t doing half bad either. After all, just a few days ago Mark Carney was surprisingly hawkish in a speech and a couple of U.K. reports had printed much better than we expected.

This is why I’m taking advantage of yesterday’s moves. Though I think that the Fed is on track to raise its rates, an actual rate hike probably won’t happen at least until summer.

I decided to risk 0.5% of my account at market (1.5438) and place a 100-pip stop loss. I’m planning on targeting the top of the channel for now, but I’ll see if I can add and maybe build a long-term long position on the pair.

What do you think of the setup? Is this something you would take for yourself?

XOXO,

Huck

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