FxWirePro: Unwise to get bear-trapped in GBP/USD by overbought signals, consolidation phase in major trend remains intact – Bid boundary binaries to trade

Chart and candlestick pattern formed - Rising channel pattern (on weekly plotting) and hammer pattern candlesticks with bullish DMA crossover (on intraday and weekly plotting).

Well, contemplating and synthesizing these chart and candle patterns, coupled with the fact that the intermediate trend and major trend has been uptrend that has gone into the consolidation phase, we foresee more likely to spike further.

You could see as and when the price touches channel support, sharp spikes are seen upon hammer pattern candlesticks (refer monthly plotting).

For now, more upside potential is foreseen as the current prices bounce above EMAs.

On the flipside, the major stiff resistances are seen at 1.3657 levels. But both the leading oscillators have been constantly converging upwards on this timeframes to signal strength in rallies.

Trade tips: On an intraday speculative basis, we see the price to remain within the range between 1.3550 and 1.3506 (i.e. 7DMA levels). Hence, we advocate buying boundary binaries with upper strikes at 1.3550 and lower strikes at 1.3506 levels.

The trading between these strikes likely to derive certain yields in this perplexed trend in the short term and the major trend, more importantly, these yields are exponential from spot movements.

For cash or nothing, these options would be exercised if the forward prices to remain between both strikes (i.e. 1.3550 > Fwd price > 1.3506).

Currency Strength Index: FxWirePro's hourly GBP spot index is inching towards 102 levels (which is bullish) ahead of UK’s manufacturing PMI prints. While hourly USD spot index was at shy above -16 (neutral) while articulating (at 06:45 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

Hence, bulls of this pair are most likely to extend rallies upon our above stated technical rationale.

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