GBP/USD is currently testing a significant inflection point, which is something you should absolutely watch if you're seeking for long-term trends to trade.
How do you feel about the setup?
The British pound has been in an uptrend versus the US dollar since the pair broke out of the 1.0400 support area in late September 2022, if you haven't been too busy staring at short-term charts.
After a few months, the pair is presently trading nearer to the psychological support level of 1.2700.
The fact that 1.2700 is close to the trend line support, which hasn't been broken since the pair began exhibiting higher highs and higher lows, makes the setup fascinating today.
In addition, the GBP/USD pair is currently trading at the 50% Fibonacci retracement of a month-long decline that began in mid-July. Oh, and notice how the 100 SMA is positioned right below the trend line!
If you aim for July's highs at 1.3100, a long trade at current levels or the first indications of bullish momentum would produce a favourable risk-to-reward ratio.
You're not sure Cable can continue its upward trend?
As soon as you notice continuous trade below the trend line that we've identified, you can also consider shorting the pair.
Just be sure you're trading a breakout rather than a fakeout!
Use the best risk management techniques you can for another day, regardless of the bias you choose to trade.
