23.02.202413:42 Forex Analysis & Reviews: GBP/USD: trading plan on February 23, 2024

Baseline scenario

Hi, dear traders! In the last few articles with trading ideas for the pound sterling, I suggested we consider buy positions. On February 15th, an alternative scenario came into play, which involved consolidating above the zone of 1.2584 – 1.2611, followed by subsequent growth. Over the next few days, several more buy signals were formed. The GBP completed three rebounds from the zone of 1.2584 – 1.2611, so the bullish scenario remains valid. Yesterday, the bulls nearly pushed GBP/USD to 1.2715, after which they gave up their positions, and the pound sterling returned to 1.2611. However, a new rebound from this level once again allows us to look towards buying.

If the growth of the GBP was significantly hampered by the news background yesterday, now such a problem should not exist. The British statistics were not as strong as the bulls had hoped, which caused their retreat afternoon. Today, the economic calendar is almost empty. Besides, I want to point out an ascending trend channel, which still defines traders' sentiment as bullish. Moreover, the instrument had a rebound not only from the level of 1.2611 but also from the lower line of this channel. The waves show us a new three-wave structure in the making. I believe that the bulls may attempt another rise to the level of 1.2715.

On the 4-hour chart, the GBP has settled above the descending trend line and has the potential for growth towards the correctional level of 61.8% – 1.2745. However, I want to remind you that horizontal movement persists, which is clearly visible on the 4-hour chart. I do not expect a strong rise in the GBP. Analysis should primarily be conducted on the 1-hour chart, with data from the 4-hour chart only supplementing it.

Alternative scenario

There are no alternative options today. I could recommend selling if GBP/USD consolidates below the zone of 1.2584 – 1.2611, but the last two closures of this kind did not result in any downward movement. Besides, the GBP would need to fall by 100 pips today to enable such consolidation. After such a drop, it would be very difficult to expect a further decline of the GBP. Today, we might only try selling in case of a rebound from 1.2715. But the instrument still needs to reach that level.

Intraday outlook and trading tips for GBP/USD

Today traders have the reason to expect growth of the pound sterling. Indeed, fundamentals set the stage for GBP's further rise. If the price settles below 1.2484-1.2611 today, the buy signal would be cancelled. A drop from 1.2715 would be the reason to plan short positions on GBP/USD.