GBPUSD appears to be forming a near-term bottom near the channel support we’ve discussed recently.
The potential inverse head and shoulders reversal could send GBPUSD 200 pips higher this week.
So in today’s video, I discuss what it will take for the pound to confirm the setup, my targets, and invalidation levels.
GBPUSD has formed what could be an inverse head and shoulders on the intraday time frames.
I discussed the potential reversal pattern in the weekly forecast.
However, I figured it deserves its own write-up given the profit potential and the fact that it isn’t confirmed just yet.
GBPUSD buyers need to secure a 4-hour close above 1.3200 this week to confirm the bullish pattern.
Those searching for that extra bit of confirmation can wait for a daily close above the 1.3200 handle.
If GBPUSD can manage it, the objective lies 200 pips higher near 1.3400, but I would place the target between 1.3380 and 1.3400.
The objective is found by measuring the distance between last week’s low and the 1.3200 neckline.
If you saw last weekend’s forecast, you know that the 1.3380 region has been significant for GBPUSD since 2019.
So it makes sense that the measured objective for the potential 4-hour inverse head and shoulders lines up with a historically significant area.
But the keyword is “potential”.
As of this writing, GBPUSD has not broken above 1.32. So I need to see at least a 4-hour close above it, ideally a daily close.
I’m still long GBPUSD from 1.309 as mentioned to members last week, and I plan to add above 1.32 if we get it.
Alternatively, a close below 1.309 would likely invalidate the setup.