Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
Тhere always seems to be someone offering a fundamental explanation for the way the markets behave. These recent rallies in Eurusd and Gbpusd though would challenge even the staunchest fundamentalist. I feel quite fortunate in that I do not need to try and make sense of it all; the charts are my only guide. I do consider it important to have an awareness of fundamental issues, so I am not suggesting that that aspect is unimportant, but the market rarely respect the what we think ‘should’ happen. Case in point, the Cable rally continued unhindered on Friday after very bad news. Since breaching up trendline on the daily back into the buy zone, the swift drop stopped abruptly after retesting that line at 1.5837 (see chart below). The weekly timeframe shows a closing price still within the range of a critical resistance at the 1.6000 level. It has the look of a potential head and shoulders formation, but having seen how strongly support has been holding, I maintain a bullish outlook on the pair.
For the coming week, I expect some consolidation to take place, before an eventual breakout. The resistance and support of the consolidation range would then be 1.6000 and the daily trendline support at 1.5800s. The next major resistance lies at 1.6280s, followed by the longer-term down trendline on the weekly chart at 1.6400s.
Thanks for reading. Enjoy the rest of your weekend, and see you next week! 🙂
…Don’t forget to let me know what your own views are on Gbpusd!
I’m also watching Gbpchf: http://winnersedgetrading.com/my-gbpchf-trading-plan-trade-setup/
Winner’s Edge Trading, as seen on: