GBPUSD - Short potential

26 Mar 2023

We have a few possible entries on this pair looking at both a potential breakout of a significant support level, a potential retracement entry and the potential for both with a possible head and shoulder pattern coming into play. Firstly, let’s look at the event price pushes higher towards 1.2250, rejection away from here using either a shooting star or engulfing formation for confirmation would see a run into where we can either take profit off the table or look for price to breakthrough and open further downside into 1.1980. if price doesn’t push up in the beginning of the week, then we have a ready-made entry at 1.2190 ready for us and a break below here would likely see a sharp drop into 1.2120 and then 1.1980 in extension to this should this small level of support fail to hold. Lastly we have the potential for both of these scenarios to play out in the form of a head and shoulders pattern, a push higher into 1.2250 and rejection away would give us the formation of a right shoulder and would see 1.2200 act as our neck line in this event we will be able to enter at both areas and hold or target at 1.1980 as this pattern would provide confidence in a reversal of the recent bullish trend.