Since April 17 this year when GBPUSD set the maximum at 1.4370, the pair almost continuously moves in a downward trend. Yesterday, after reaching 1.3090, intense increases began. Yesterday’s daily candle had 170 pips and its range completely engulfed the previous one. A formation of engulfing Outside Bar was formed. It has a clearly bullish character and promises a change in market sentiment and a very probable upward correction.
Looking at the situation on the chart in terms of PA+MACD strategy, we can see that the bullish character of Outside Bar confirms the created minimum on the MACD oscillator and its growing value. In addition, there is a bullish divergence between the price and the mentioned MACD oscillator which also supports the probability of increases.
From a closer perspective on the H4 chart, we can see that the next resistance may be the downward trend line, which broken may lead to another resistance at 1.3430. It should be noted that today’s increases on this pair were caused by the BoE communiqué, which shows that in the vote on raising interest rates a new voter joined “hawks” camp and gives the market hope for a rate hike in August this year, which can drive further increases on this pair.