GBPUSD crashed massively after the tax rate cuts news broke off. This news acted as a catalyst in the forex market to drop GBP. Now, we are anticipating a rebound on the pair before it further declines. We have formed two bullish engulfings. We will wait for the prices to retrace on the engulfing to take the long entry. The upside will be towards the previous resistance.

The descending trendline has broken out for buys and needs to retrace at the support level.

We are looking at the retracement with the confluence at the support with the retracement level of 61.8%.

EMA 50 is bearish therefore, the trend still remains bearish. We only are taking the bullish correction on this pair. We might not even retest the EMA recently.

The RSI is at 64. It is a slightly above the bullish region and has the potential to tap the over bought region and form a bullish divergence which will act as a technical indicator to our confluence.

GBPUSD long positions

Oct 04 2022