Enters congestion area from January
The GBPUSD has entered a congestion area from January where there were a number of swing lows. The chart below (follow the circled numbers) shows the different swing lows where traders were buying dips on multiple occasions back in January. Those levels include 1.50345, 1.5055, 1.5077 and 1.5095. The price has made its way to - and through - the 1.5095 level, but is stalling at the 1.5077 level currently.
Picking a bottom can be difficult in a trending market. It does help if there are levels/area that acted as swing lows in the past. It also helps if there are a number of them. At least risk can be defined and limited. The levels can also give confidence if a level holds and then moves back above a higher level. Many a trader has had success picking a level - like 1.5077 - putting a stop at 1.5070 and looking for that move back above the 1.5095/1.5100 to give confidence in the trade and a nice risk/reward profile. However, you are stepping in front of the trend. So be sure to define your risk. The trend can keep the acceleration going - fed by longs who are caught above.
Today is about the USD as the US employment report will have traders thinking June for the Fed lift off. So care must be made with purchases. If there is a country to follow the US lead, it might be the UK. So it might be worth a try, but for me it would be hit or miss against one of the level, but if it is a miss, I suggest not risking a lot. There might be better opportunities on different days. .
