A Bumpy Ride for GBPUSD this Week

The GBPUSD pair has been fluctuating throughout the week. While bulls wanted to start the week with an upwards trend, it was the bears who won the first three days of the week. The pair was forced to move below the opening level and the bears were able to maximize their profits.

(Source: My OctaFx Trading Account) 

The GBPUSD pair drove down the slope and tested the levels at 1.3850. This has been a huge drop compared to last week, especially when the UK economy was set to rise after the introduction of Covid'19 vaccine. The drop came as a surprise to the bulls who were quite sure it would move up the ladder but that didn't happen.

While the bears were enjoying this ride, many bulls were calling it a trap for bears who were being set up by the bulls. But is that true? Was it actually a trap for the bears?

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If we look at the current price levels, we can consider this claim to be quite valid. While the bears were looking for a 1.3700 touch down, the pair decided to take a sharp turn and move back towards the bulls, just like they expected.

Right now the GBPUSD pair has crossed the 1.39 mark as you saw in the image above. It is moving close to 1.40 mark which would prove to be very damaging for the bears, especially if they've invested a huge lot size.

The bearish trend was shortlived as expected but smart people are those who took advantage of both the trends, first by selling and then by buying.

I've been predicting the exact same trend since Monday evening, the bearish trend was quite unrealistic keeping in mind the vaccine edge that UK had over its rivals but then again, the impact of Brexit was also a factor to be considered. The question here is, how long will the bullish trend continue and where is the pair headed?

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To be honest, right now it seems like a steady growth for the GBPUSD pair but it is nothing more than a deception. If we analyse the economy of United Kindom, it is weakening with every passing day. UK does have an edge over rivals in terms of the pandemic vaccine but the unemployment rates are high, inflation is high and other issues are eventually going to pull this pair back from its heights.

I expect it to touch the 1.41 mark or even 1.42 before declining again. If you're a trader planning to trade, now is the time to sell if you're planning to profit in the longer run but if you want to scalp, now is the time to buy.

However it is important to note that the trends have been very volatile since the beginning of this week and at any point the GBPUSD pair can take a sharp U-turn before rising back up again.

Forex is one of the largest financial markets in the world but also the riskiest. One can never predict what's coming. Let me know what you feel is going to be the future of this pair in the comments section below.

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