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Will Cable's retracement give another bullish setup?

Friday, September 6, 2019 11:59 AM GMT

As Uk’s Parliament is in a deadlock, with Members of Parliament effectively passing a bill that prevents Boris Johnson from committing a no-deal Brexit but at the same time rejecting his bid to resort to snap elections, a potentially rewarding set-up is formed at the GBPUSD pair.

Remember that in all Bank of England’s press releases, following this year’s monetary meetings, the assumption has been that the UK will find a deal that would determine its trade relations with the EU, and that we will not come up to a hard Brexit.

Reviewing the broaden technical picture of Cable, the pair gave a strong daily reversal formation including a positive MACD divergence, a hammer candlestick and a failure swing. The price was exploded to the upside and the pair managed to break out the mid-term downside channel to the upside.

H4

Heading to the hourly timeframe, we may speculate a potential retracement scenario as markets usually prefer to validate the significant trend reversals. Though it may never happen if bulls are in full control. Therefore, bulls may have a potential buying opportunity near to the violated channel’s upper side and the Fibonacci area (23.6 – 38.2%).  On the other hand, if the price goes below 50% or 61.8% (major support) of Fibonacci then this scenario will be busted.

H1

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade.

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