GBP across the board strengthened from Monday. GBP bottomed our earlier and then started its bullish rally throughout the week.

- Market structure: The current structure on GBPAUD is bullish. The formation of HH’s and HL’s is confirming the bullish structure. Currently, GBPUSD resides at 1.3762, which is a resistance level. We anticipate a pullback before market continues its move upwards breaking the resistance. Good buying price is at 1.3718. Conservatively, we can also wait for the third retest on the support, which seems unlikely. Therefore, we will go with the conservative buying price.

- Trendline: The descending trendline formed on GBPUSD, took the breakout buys, with candle validations. Market continued rallying after the trendline breakout buy and did not give a chance for a retest. Therefore, we will wait for a lower timeframe descending trendline breakout for an added confirmation. Otherwise, pertaining to other factors, we can take a long position as well.

- Retracement: The golden retracement area of 75-78.6% is at the support level. The confluence formed with the support and golden area makes it an ideal level for bullish position. Conservative figure of 61.8% level is also at 1.3718.

- EMA's: GBPUSD has formed a ranging market between the EMA’s. EMA 50 was pierced to the bullish side on the previous candle; hence we can anticipate a retest before breaking the resistance. There is a chance of EMA 50 testing the market at the minor support level with retracement level 61.8%. EMA 200 is above the current market and depicts a bearish bias. Our potential target could be the retest of the EMA 200.

- RSI/CCI: Both the oscillators are in the bullish region. CCI is particularly over bought being at 250 level, where as RSI is at 62. Its wise to wait for the oscillators resorting back to the neutralized levels, or at least below the over bought levels.

GBPUSD has 3 confirmations for the long position. Our anticipation is of a correction due up to 300-400 pips from this current market condition. We will take long positions at our given levels and wait to see what happens when it starts moving up.

GBPUSD buys from retracement

Aug 25 2021

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