FxWirePro: GBP/USD likely to rise further as bottom forms

The correction could very well be over,

• Price actions over the past two days, suggest that the pound could reverse the recent correction and move higher against the USD.
• The chart clearly shows that GBP/USD has formed a hammer candle yesterday, which was followed by a ‘Dragon-fly’ Doji candle; both are important signs of bullish sentiment.
• In addition to that, probabilities are higher that despite the ongoing gridlock in negotiations between the European Union and the United Kingdom, many a good news might hit the market- such as amendments like avoiding a no-deal Brexit, taking account of public opinion via the second referendum, and an extension of the Brexit deadline as 29th March approaches.
• Retail sentiment has dropped to the neutral zone. Retail traders have reduced their long positions in the pound against the USD, and now retail positions are equally divided among long and short. Net retail positions could now easily shift to the short side, which would give the pair a bullish bias. Retail numbers are based on data from IG markets, a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting.

Trade idea:

We have been bullish on GBP/USD for quite a while. Hence, we recommend resumption of long positions, as we expect the pair to clear 1.33 hurdle area.