Review of Previous Analysis
In our previous analysis, we identified a bullish expanding triangle pattern on the GBP/USD four-hour chart, signaling strong upside potential. Since that review, the pair has rallied approximately 270 pips, confirming the bullish outlook.
Now, GBP/USD has formed another bullish continuation pattern – a Three Methods formation on the four-hour chart, which suggests that the uptrend is still intact, and further gains may be ahead.
Technical Update: Three Methods Pattern on the Four-Hour Chart
📈 Key Observations:
✅ GBP/USD has gained ~270 pips since the last analysis, validating the bullish bias.
✅ A Three Methods pattern has formed on the four-hour timeframe, signaling a continuation of the existing trend.
✅ The pair is approaching a breakout, which could lead to another leg higher.
Understanding the Three Methods Pattern
The Three Methods pattern is a bullish continuation setup, typically appearing mid-trend, indicating that the market is consolidating before resuming its upward movement. The structure consists of:
1️⃣ A strong bullish candle, showing dominance by buyers.
2️⃣ Three or more smaller bearish candles, reflecting a controlled pullback (profit-taking phase, not trend reversal).
3️⃣ A final large bullish candle, confirming renewed buying pressure and trend continuation.
This formation suggests that sellers failed to push the price lower, and buyers have regained control, positioning GBP/USD for an imminent breakout.
🔹 Attached: Updated four-hour chart of GBP/USD, highlighting the Three Methods pattern and breakout level.
Potential Next Moves
📌 Bullish Scenario: If GBP/USD breaks above the recent consolidation range, it could extend gains further. The measured move target suggests another 100-150 pips higher in the short term.
📌 Bearish Risk: If the breakout fails and the price drops below the lowest candle of the pattern, we may see a short-term pullback. However, as long as the structure holds, the uptrend remains intact.
Key Event to Watch: Bank of England Interest Rate Decision
On Thursday, the Bank of England (BoE) will announce its latest interest rate decision, which could have a significant impact on GBP/USD. Market participants will be closely watching for any signs of policy shifts or forward guidance regarding potential rate cuts later this year. Increased volatility is expected around this event.
Fundamental Context & Market Outlook
🔹 The US dollar has weakened in recent sessions, allowing GBP/USD to rally. Continued USD softness could provide further support for the pair.
🔹 Market focus remains on interest rate expectations, particularly how the Bank of England (BoE) and the Federal Reserve (Fed) approach monetary policy in the coming months.
Legal Disclaimer
This analysis is for informational and educational purposes only and should not be considered financial, investment, or trading advice. The author is not a licensed financial advisor, investment manager, or portfolio manager, and the information presented does not constitute a recommendation to buy, sell, or hold any financial instrument.
Trading in forex and commodities involves high risks, market volatility, and external macroeconomic factors that can significantly impact price movements. Readers should conduct their own research and seek guidance from a qualified financial professional before making any trading or investment decisions. The views expressed are based on publicly available data and technical indicators at the time of writing and may change without notice.
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