Here is a 1hour chart of the GBP/USD pair. The Bank of England decided to leave their key interest rates unchanged, targeting .50%, and in response to this decision, this pair made a quick move up last night, but was quickly brought back in at the crucial monthly resistance around 151.50. We have seen multiple assaults on this level, but with no luck. Sooner or later, something will give, and from what I am seeing in the charts I believe we will get some nice downside action into the end of this week and the beginning of the next. I have drawn two independent channels on this chart, the first and smaller being the parabolic bull channel that formed after the BOE rate decision, and the second and much bigger channel being the general trading range between support and resistance zones. Over night, however, we broke down out of the first channel, and things appear to be headed towards the lower boundary of the second channel. We also saw an increase in volume at the 'roll-over' point, so it's a great idea to keep an eye on this on. I am currently short the EUR/JPY, which has a similar setup, and I have a resting order to short the GBP/USD at the first sign of continued weakness...
Please write me if you have any questions about potential trades and setups.
Happy Trading!
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