GBP/USD toying with order block zone
|The British Pound remains within the broad price range of 1.3800 to 1.3960. There is no clear trend on larger timeframes but the smaller timeframes provide ample stretch of a trend to take some advantage. Big jumps in both directions suggest short-term trading opportunities.
After a big fall from beyond the 1.3900 handle, the price found some traction near the 1.3880 order which can be considered an order block on the 4-hour chart.
The price is also supported by the 18 period EMA around the same level. Meanwhile, we have a big bullish bar with very high volume which may protect the price from further dropping.
Now, let's take a look at Open Interest for the British Pound.
The Open Interest is consistently dropping over three consecutive trading days. Out of three days, one day was bullish while the remaining two were mixed. It indicates that long holders of the previous week did some profit-taking. Perhaps, this is due to the potential risk event of BOE, due this week.
Trading scenario
You can buy around the current level with an upside target of 1.3925 ahead of 1.3950 and finally 1.4000. Alternatively, if the price breaks below 1.3884, then you should look for a selling opportunity with targets at 1.3850, 1.3830, and finally 1.3800.
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