Accelerating economic growth supports British Pound
UK GDP grew 0.4% in Q3, above expected 0.3% rate. Will the GBPUSD resume strengthening?
On the daily chart the GBPUSD: D1 has breached above the 50-day moving average MA(50).
- The Donchian channel indicates an uptrend, it is tilted up.
- The MACD indicator is below the signal line and the gap is narrowing, which is a bullish signal.
- The Parabolic indicator gives a sell signal.
- The stochastic oscillator is rising but hasn’t reached the overbought zone.
We believe the bullish movement will continue after the price breaches above the upper Donchian boundary at 1.3326. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 1.3087. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.3087) without reaching the order (1.3328) we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | Above 1.3326 |
| Stop loss | Below 1.3087 |