Analysis of GBP / USD Divergences for July 19. Bullish divergence allowed us to begin recovery
The GBP / USD pair fell to a correction level of 200.0% at 1.3047 and a reversal in favor of the British pound on the 4-hour chart. As a result, the growth began in the direction of the correction level of 161.8% at 1.3301. Binding divergences on July 19 can not be seen in any indicator. The consolidation of quotes under the Fibo level of 200.0% will work in favor of the US dollar and the pair dropped to the correction level of 261.8% – 1.2638.
The Fibo grid was formed on extremes from March 1, 2018 and April 17, 2018.
On the hourly chart, the pair reversed in favor of the British currency and fixed above the correction level of 100.0% to 1.3049, after the bullish divergence of the CCI indicator. As a result, the growth process can be continued today in the direction of the next Fibo level of 76.4% at 1.3122. The pair’s retracement from the correction level of 76.4% will allow traders to count on a reversal in favor of the US dollar and a slight drop towards the correction level of 100.0%. Fixing the quotes below the Fibo level of 100.0% will increase the chances of the pair to continue falling towards the next correction level of 127.2% – 1.2963.
The Fibo grid was formed on extremes of June 22, 2018 and June 28, 2018.
Recommendations for traders:
Buy the GBP / USD pair with a target of 1.3122 and a stop loss order under the correction level of 100.0%, if there is a close above the Fibo level of 1.3049 (hourly chart).
Sell the GBP / USD pair with the target of 1.2963 and a Stop Loss order above the correction level of 100.0% if there is a close under the level of 1.3049.