After months of consolidation inside a 300-pip range, GBP/USD finally made an upside breakout as it reached the 1.6350 minor psychological level recently. This could mean that more gains are in the cards, as the next resistance level is located around 1.6700.

In addition, the size of the breakout is typically the same size as the rectangle pattern. In this case, it spans from 1.5950 to 1.6250, so the resulting breakout could carry on to 1.6600-1.6650.

Going long at market with a stop inside the range and below 1.6250 could yield a 3:1 return on risk if you’re aiming for 1.6650. Moving stop to entry once price heads halfway there is a good way to manage exposure. Adding every 100 or 150 pips could increase the reward ratio. 

By Kate Curtis from Trader’s Way