justatrader
Long

GBPUSD Positioning ahead of FOMC

FX:GBPUSD   British Pound / U.S. Dollar
231 3 4
I've been long on GBPUSD             from 1.60 levels and a bit biased that GBPUSD             could be bullish .

Reasons:

1. Bullish divergence: RSI makes a higher low as price makes a lower low. Price managed to break above 1.60717 and could retest this level again.
2. Inverted H&S: Key price level to break is 1.61823
3. New rising trend line is holding with two contacts made already. Confluence with 1.60717 retest
4. Longer term, the lows made at 1.5882 falls within previous support regions.
5. Not shown on chart, a negative divergence emerged after prices topped. The lows at 1.5882 incidentally stalled near the start of this divergence.

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What am I looking for?
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A retest of 1.60717 and it should hold for a small rally to/or a break of the neckline at 1.61823, validating the IHS             which gives an upside target to 1.64826.

Invalidation: A break below 1.60717 would also mean a break of the rising trend line . However, a retracement to the TL break near 1.60717 could be seen where i'll exit longs.

****Monthly Charts (see comments)****
price slowly pushing higher after a spinning bottom. Looking to reduce position at BE and see where price will head to next. A daily close above 1.607 will bring back the bullish bets based on the on going IHS pattern now clear on daily charts as well. US GDP is the key risk
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and GBPCAD short is my hedge against the Cable.
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Monthly Charts show that the GBPUSD's declines are limited for now, although the monthly candle isn't closed yet. 1.621 is this month's open. So if price manages to break above this level and hold, we will see a doji candlestick start to form. Occurrence of this after 3 months of decline will indicate that the bears are starting to be unsure of holding on to GBP shorts.
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