Million Dollar Challenge

GBPUSD is a highly volatile pair. Many day traders love to trade GBPUSD. British Pound has been under tremendous pressure ever since Brexit announcement was made. Just after the Brexit vote GBPUSD fell more than 2000 pips. Then it made recovery. Next year it suffered a terrible flash crash and fell 1100 pips in a few months before making recovery. In the last few months, a lot of pressure has build up as Brexit negotiations are not going well. Take a look at GBPUSD H1 chart below!

In the above chart, you can see see GBPUSD activity last week. First it fell heavily. This fall was due to the Brexit
pressure. UK Prime Minister May has failed to get Brexit plan approval from parliament. Then GBPUSD turned and has made a rally. GBPUSD is a resilient currency pair. If you are a day trader, you will love to trade it. Just keep this in mind that GBPUSD has the habit of taking unexpected turns. So always be on your guard. Take a look at GBPUSD H4 chart below:

You can see the big bearish candle with a long lower shadow. Almost all the currency pairs having USD on one side has this candle with a long shadow. After that you can see there was a strong rally and GBPUSD has almost recovered. 

When you are trading GBPUSD, keep on eye on the Bank of England and the US Federal Reserve Bank. These two central banks have a major influence on GBPUSD. Bank of England take are of British Pound and the US Federal Reserve Bank take care of US Dollar. When anyone gets weak or strong, we see this pair move tremendously. European Central Bank ECB also sometimes exerts influence indirectly. Whatever just keep this in mind that financial markets are highly interlinked. All markets are interlined and move starting in one market can easily ripple into the other markets. Take a look at GBPUSD Weekly chart:

In the above chart, you can see the bullish pinbar. This is a strong signal that in the next few weeks, we are going to see GBPUSD bullish. 1.24363 appears to be the support for the next few months.

Long Legged Doji Candle Forms as Brexit Vote Fails
This week there was a crucial Brexit vote. UK Prime Minister Theresa May has prepared a Brexit plan which needed to be ratified by the UK Parliament. Unfortunately the Brexit Plan prepared by May got rejected by the UK Parliament. A lot of volatility was being expected due to this Brexit vote. You can see the GBPUSD daily chart below where a big doji candle has been formed.

As you can see in the above GBPUSD daily chart, a classic doji candle has been formed. We call such a candlestick pattern as the long legged doji candle. Daily open was 1.28623 and the daily close was 1.28608. You can see the daily candle body is just 2 pips which indicates a very tight doji candle on the daily chart. Doji candles always predict new trends. So I believe this is the start of a new GBPUSD uptrend.

MACD is also a very good momentum indicator that you should use a lot. In the above chart, you can see MACD showing positive momentum on the daily chart. So it was expected that GBPUSD will move up. Brexit vote took place on Tuesday this week. You can see there was a lot of volatility on that day. First GBPUSD fell down under the fear of Brexit Plan getting approved. But when it became clear that UK Parliament has voted against May Brexit Plan, GBPUSD turned bullish and shot up. GBPUSD closed just 2 pips below the daily candle open which shows market indecision.