Price on GBP Forex pairs are racing higher as I make this charts in focus price action post for you.
A lot of these pairs are making strong moves higher and into space or breaking out of strong resistance areas and either have room to move higher, or if they make a quick re-test back lower, could then flip and continue on with the strong moves they are already now on.
GBPUSD Daily & 4 Hour Chart
As you can see below on the GBPUSD daily price action chart; price has already made a break of a major resistance level and then a fast re-test, forming a bullish engulfing bar = BUEB.
Price is now sitting right at the next important daily level and could repeat the pattern. Right at the moment price is making a major test and attempt to breakout higher into space.
This could present with opportunities for breakout and quick intraday long setups if price flips and re-tests the potential old resistance / new support.
GBPUSD Daily Chart
4 Hour Chart GBPUSD
GBPNZD 4 Hour Chart
Whilst the GBPUSD is trying to confirm the break and move higher, the GBPNZD has broken and convincingly so.
In saying that; I always look for a close above or below on the daily chart out of a support / resistance level and whilst we have not had that as yet, price has smashed and closed out on the 4 hour level and there is space higher.
If price can make a rotation lower and into the old resistance and new support, then making long trades at this flip and support would be with the intraday momentum and would have space to move into. We would just need an A+ trigger to confirm the setup.
If you have a look at this one on your own charts, you will see this has been in a strong trend higher and taking long setups would be trading with the trend on your side.
GBPNZD 4 Hour Chart
GBPCAD Daily Chart
This is the most ranging / sideways of the pairs discussed – but it has space and that is crucial.
Before making a trade, the key question we should always ourselves is “Do I have a path into my first support / resistance area?”.
In other words; is there space / or is there just a big bunch of traffic and support and resistance in the way.
You know when you are driving in the city and you cannot move as there are cars everywhere = traffic.
Then, you finally get to the other side of the city and can move freely in the country = space.
It is the same for price action and trading in the markets!
The reason a range is more likely to continue on and on is because it is caught in traffic. The same way that price will start to move a lot faster and more freely when there is space = no support or resistance in it’s way, there are no blocks or order flow (buyers /sellers) holding it up!
Read a more in-depth lesson here: Reading Order Flow with Price Action
GBPCAD Daily Chart
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