GBPUSD Breaking out of a Descending Broadening Wedge
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> Weekly pulled back to .618 Fibonacci, horizontal support, 200ema and found support to start a bull run now 3 weeks in. Possibly looking to reach the recent highs area at 1.4200.
> Daily formed a descending broadening wedge & is currently starting to breakout to the upside.
1. Price could continue breaking out on the daily and form a small pullback to retest the wedge and horizontal support (maybe 1 hour flag over a few days) before continuing to 1.3950 which is the top of the pattern.
OR
2. This could be a false breakout of the wedge. Price could make a larger pullback, moving back into the wedge and forming a higher low around 1.3500 horizontal support/ .382 Fibonacci/ 50ema, before forming a reversal and breaking out of the wedge again making a run to 1.3950 to 1.4200.
Invalidation for an entry would be price continuing to run to target without pulling back or price moving back into the wedge and failing to form a higher low, moving back down to the lows. A negative is the monthly did form a double top and is in a bearish run.
> Daily formed a descending broadening wedge & is currently starting to breakout to the upside.
1. Price could continue breaking out on the daily and form a small pullback to retest the wedge and horizontal support (maybe 1 hour flag over a few days) before continuing to 1.3950 which is the top of the pattern.
OR
2. This could be a false breakout of the wedge. Price could make a larger pullback, moving back into the wedge and forming a higher low around 1.3500 horizontal support/ .382 Fibonacci/ 50ema, before forming a reversal and breaking out of the wedge again making a run to 1.3950 to 1.4200.
Invalidation for an entry would be price continuing to run to target without pulling back or price moving back into the wedge and failing to form a higher low, moving back down to the lows. A negative is the monthly did form a double top and is in a bearish run.
Note
Price has rejected the top of the wedge and pulled back to horizontal support, 50ema & zone between 0.382-0.618 Fibonacci and formed a unconvincing bullish low test candle. Todays FOMC news didn't make any affect and price is still holding support.1hr chart currently forming a triple bottom in a 4hr bearish trend. I will be waiting for price to make a clear bullish trend change on the lower time frames before entering the trade.
It would be nice to see a bullish low wick candle on the daily chart rejecting this support area before starting a bullish run, but with hawkish FOMC today, this support could very well fail and price could drop back to recent daily low support zone.
Note
Daily chart found support at 0.618 fibonacci, formed a higher low & started a new bull run. The 4hr chart formed a higher high and currently forming a higher low at horizontal, 50ema & .618 support with deceleration. If this area holds support, it could be the start of a new 4hr bull trend, and continue the daily run, possibly breaking out of the wedge and making a higher high, which would confirm a new daily trend. A lot of resistance still to break through though.
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