- GBP crosses are setting up for a bullish extension.
- Cable is on the verge of a break of structure and bulls will be seeking a discount n the way to the 1.3430s.
It is one or the other until breakeven can be achieved, but just like the following GBP/JPY analysis, cable bulls are in for an opportunity on the next bullish close.
The following is an analysis of the daily and 4-hour chart which shows that the price is in the throes of the next bullish extension as the correction of the prior bullish impulse meets support.
Daily chart
-637422938360262040.png)
As tight as it is until the next liquidity wick and resistance, there is still the prospect of a 1:3 risk to reward opportunity according to the following analysis:
Firstly, the market is bullish and in a swing trading scenario, we want to trade in the direction of the trend having already capitalised on the prior bullish impulse.
However, it is always wise to recognise when a trend could be maturing.
The current trend is not guaranteed to print a new swing high beyond the liquidity wick's high of 1.3482. Therefore, it is prudent to apply less risk towards this liquidity/resistance.
With that said, traders trade what opportunities they see and the price action has all of the makings for a high probability long/buy set-up.
Since the last bearish candle's lows on the 19th Nov, the price has made a 50% mean reversion from the highs in a correction of this bullish impulse.
The correction is significant enough to look for an opportunity to get back involved with the trending market.
The 4-hour time frame is suitable for identifying the market structure and technical environment for a long position:
4-hour chart
-637422962478542621.png)
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