GBP/USD 4hr Outlook – 02 March
The last 4hr candle on the Cable was a completion of a bullish Hikkake pattern. Its clear to see the Sterling has been trending up against the dollar and the formation of the Hikkake gives traders an opportunity to join the current bullish momentum.
The chart below shows the Hikkake pattern. The pattern is strengthened due to the 3 inside bars. Hikkake’s with multiple inside bars tend to give the strongest signals.
The bullish pin bar which completed the pattern shows a clear and concise rejection of the important psychological and technical support/resistance level at 1.5900. The chart below shows how the tail of the pin bounced almost perfectly of this level coming just a few pips shy.
We can also take account of the trend line bounce the pin bar made. The pair has been respecting the trend line since late last week. Once again this further strengthens our bullish 4hr outlook.
We’ll be looking to enter a long trade reacting to the bullish price action shown. A possible entry traders could take is when the market once again test’s the trend line. Alternatively traders could wait for a 50% retracement of the pin placing their stops just below the tail or below the trend line. Initial targets could be taken at Wednesdays highs giving a strong R:R trade.
