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!
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?