Two events need to be examined next week for this pair are:
- CPI on Tuesday
-Fed's Bernanke speech on Thursday.
Those two events would guide G/U price. And you have to understand what event will be dominant.
So I consider GBP and USD
GBP ! USD
-Good Economy, recover good - Good data might trigger taper in December
- Monetary policies proved positive results - Labor market shows being good condition
So what is more important ?
That is FA information.
Now I consider TA information.
Firstly,I think GBP lost its rally motivation. G/U tried to touch 1.63 level. That is Nine resistance. It's very hard to break that resistance. That is also the very very strong resistance from August 31,2011. From that day, G/U couldn't break that level.
Consequently, now is the time for USD moves the market.
Secondly, pay attention into Head and Shoulder pattern and the I show on the chart.
G/U tried to break that support last week, but unfortunately, it coundn't. Even CPI of UK is good next week, I think G/U would not break that support. That is the long term support : very rigid to break.
Thirdly, G/U price now lies between 11.4% fibonacci level and 23.6% level. It has tendency to touch those two levels. I think it will touch 23.6% level.
Fourthly, Price moved into . When G/U moves into , it usually fluctuates greatly before escaping Cloud. I think It would escape the Cloud by moving below the Cloud.
In short, I predict G/U will be sell-off: reach to 1.58 . Good data from US will move the market.. Bernanke will provide more specificly about taper decision in next month before end the year.
I BET SHORT POSITION FOR G/U PAIR.