The pound is currently at multi year highs, with the daily chart showing serious hesitation (allthough by the time I finished this chart the daily chart started rallying). The weekly chart stands at a very important resistance area, if you will scroll back 20 years you can see this pair lagging several times at this level.
If we look at the last few years, we can notice how the MACD histogram pointed out tops and bottoms, when price was standing at important S/R levels. With one exception, all these divergences confirmed trends before they actually got underway. Even with the failed divergence, price rallied, only to draw a bigger bearish divergence.
Currently we are in a bearish divergence, and even if the histogram is rising together with price, I will be looking for shorts. A close above 1.70000 ish would make me reassess my bias.
The weekly chart shows no confirmation for a short, neither the daily. This will be a very tricky trade. I will be looking for daily short setups, and I will enter for the long term. I won't want to take any profits before reaching the support lines labeled. When and if the weekly chart will give a short signal, I will be adding to my original position using daily retracements. I will be posting charts as soon as I see something worth mentioning.
If we look at the last few years, we can notice how the MACD histogram pointed out tops and bottoms, when price was standing at important S/R levels. With one exception, all these divergences confirmed trends before they actually got underway. Even with the failed divergence, price rallied, only to draw a bigger bearish divergence.
Currently we are in a bearish divergence, and even if the histogram is rising together with price, I will be looking for shorts. A close above 1.70000 ish would make me reassess my bias.
The weekly chart shows no confirmation for a short, neither the daily. This will be a very tricky trade. I will be looking for daily short setups, and I will enter for the long term. I won't want to take any profits before reaching the support lines labeled. When and if the weekly chart will give a short signal, I will be adding to my original position using daily retracements. I will be posting charts as soon as I see something worth mentioning.
