February 2, 2023

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GBPUSD trends higher as risk of Scottish referendum recedes

2 min read

Pair trends higher on the day

The GBPUSD has moved higher after Scottish national parties election push backed the potential for a independence  vote. The pair trended to the highest level since February 25. The price has reached and intraday high at 1.4158. The high price for 2021 is at 1.4240 back on February 24.

Pair trends higher on the day

Drilling to the hourly chart, the run higher today was able to extend above the April 20 high near 1.4008, and correct down to the old high, before pushing/surging higher. The low on the correction moved to 1.40147 before turning back to the upside.

The GBPUSD on the hourly chart

Taking another step to the 5 minute chart below, the trend move higher has not seen much in terms of corrections on the way higher. However, the most recent price action may give some traders cause for pause after the price accelerated the trend move higher foundered above a topside channel trend line but failed and returned into the channel.  

The correction of the last leg higher has only reached the 38.2% of that leg higher at 1.41278. Getting below it and the 50% of that leg would give sellers more confidence the trend move may have reached a peak (at least for now). The lower trend line is also near the 50% of that leg.  If the price can move below that trend line – and stay below – it would be more bearish in the short term (could be the start of a consolidation period as well).  

However overall, the buyers are still in control. The sellers – because the market is trending today – have to prove they can take back even the smallest of control. Getting below the lower trend line and the 50% of the last leg higher. That is the minimum. If it can’t be done, the buyers remain in full control. 

The GBPUSD on the 5 minutes chart

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