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17.05.202207:30 Forex Analysis & Reviews: Trading plan for GBPUSD on May 17, 2022

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Technical outlook:

GBPUSD further rallied through the 1.2345 high on Tuesday as bulls are looking poised to push through 1.2400-10 and 1.2640 in the near term. The currency pair is looking to remain in control of bulls from here and hold prices above 1.2155 going forward. Bulls have managed to push the price up nearly 200 points from the 1.2155 lows.

GBPUSD has been dropping since the 1.4250 high and seems to have terminated around 1.2155 over the last week. The entire drop seems to be corrective (three waves). The currency pair could resume its next rally soon. Immediate resistance is now seen around 1.0650, followed by 1.3150 and higher; while support comes around 1.2155 respectively.

A push through 1.2640-50 will now confirm that bulls are back in control and that prices will stay above the 1.2155 interim lows. Also, note that GBPUSD has produced a strong bullish divergence on its daily RSI, which is a strong indication of a potential trend reversal ahead. Traders might be preparing to initiate fresh long positions.

Trading plan:

Potential rally toward 1.2650 against 1.2100

Good luck!

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