Yesterday, the pound/dollar pair made a significant downward movement.
However, in my opinion, a correction is just beginning. As for the so-called trend direction to the current market conditions, I think that the quotes continue to move in a clear upward trend. Therefore, I believe that long positions are still the priority. An uptrend implies that the price periodically hits a new high. In such market conditions, the best way to make a profit is to trade along with the trend. Sometimes I catch counter-trend signals from the levels, but with a large profit-to-loss ratio.
My pending buy orders, which triggered amid a correction to the Fibonacci levels, are still open. The pound/dollar pair is currently slightly below the entry point, so we have a small unlocked profit. I hope that the pair will continue trading upwards, and soon the quotes will test the price area where my take-profit order is located. A stop-loss order must be set just below the 61.8% Fibonacci level.
Ideally, below the nearest support level located just below the 61.8% Fibonacci level.
Let me remind you, in trading I use the entry points based on the 38.2% and 50% Fibonacci retracements.
We could limit losses just below the 61.80 Fibo level. In this particular situation, the levels of 1.4080 and 1.4030 act as the 38.2% and 50% Fibonacci levels. A stop-loss order can be placed at the level of 1.3960
a take-profit order can be set at 1.4220.
The British pound is still the leader in terms of growth against the US dollar this year among hard currencies.We can see from the trading chart that the pound/dollar pair is moving in an upward trend. Therefore, I think that market participants should focus on long positions. An interesting option is to enter amid corrections, for example, after the oscillators with classical parameters enter the overbought zone. In general, the current trend is bullish. Speaking of the coming trading days, buy orders can be opened above 1.4110
to reach the target levels of 1.4175
. In the long term, long positions could be open above 1.3700 to reach the target levels of 1.4370 and 1.4550.
Some traders believe that the potential has been exhausted.
Today’s macroeconomic calendar includes quite interesting and significant news releases, including the University of Michigan Consumer Sentiment Index. At this time, the market may become volatile.