Due to large volatility caused by various events in the recent trading sessions a broader look has been taken at the GBP/USD currency exchange rate.
What was discovered first on the larger timeframes was that the pair is trading in a rather large scale descending channel pattern. The pair has bounced off this channel down pattern's upper trend line on 26th of February.
The event has resulted in the formation of a junior channel down pattern, which is guiding the pair lower at an even steeper angle.
In regards to the next trading session, the pair is set to meet the resistance of the junior pattern and test the support of the weekly S1 at the 1.3870 level.
What was discovered first on the larger timeframes was that the pair is trading in a rather large scale descending channel pattern. The pair has bounced off this channel down pattern's upper trend line on 26th of February.
The event has resulted in the formation of a junior channel down pattern, which is guiding the pair lower at an even steeper angle.
In regards to the next trading session, the pair is set to meet the resistance of the junior pattern and test the support of the weekly S1 at the 1.3870 level.
Comment:
Finally the exact location of the dominant support can be marked, as the Pound has fully confirmed the trend line by surging against the US Dollar.
The surge resulted in the breaking of the junior channel down pattern’s resistance. However, the ascent of the currency exchange rate was stopped on Friday morning by the 55-hour simple moving average.
In general, the pair is either going to break the SMA and move to the 1.3870 mark or make another attempt to pass the long term support below.
Both scenarios can be played. So watch out for a break out from this rather rare squeeze in.
The surge resulted in the breaking of the junior channel down pattern’s resistance. However, the ascent of the currency exchange rate was stopped on Friday morning by the 55-hour simple moving average.
In general, the pair is either going to break the SMA and move to the 1.3870 mark or make another attempt to pass the long term support below.
Both scenarios can be played. So watch out for a break out from this rather rare squeeze in.
Comment:
The patterns drawn on Wednesday have held their ground, as the Pound continues to trade against the Greenback in a narrow channel down pattern. However, the decline on Thursday morning turned sideways.
If one looks at the hourly chart, it can be observed that the rate made a few attempts to rebound after meeting the lower trend line of the channel down pattern. Although, the resistance of the weekly S2 has stopped the efforts of the Pound.
Meanwhile, it was noticed that the supposed sideways fluctuations were booking lower and lower rebound points. That indicates that the decline will continue.