Daily Price Action
Shares

GBPUSD Reaches Short-Term Range Top Ahead of BOE

Shares

The GBPUSD is testing the range top that has been in place since early October. I mentioned this area in the last few weekly forecasts.

It’s no secret that the pound sterling has been indecisive of late. The currency is facing many unknowns at the moment, and that’s reflected in the price action since October.

The upcoming BOE decision is the event market participants are likely waiting on before committing one way or the other. Things kick off on November 2 at 8 am EST and conclude with a Governor Carney presser at 8:30 am EST.

However, even if Thursday’s events spur the currency out of its lull, the technicals call for more patience.

We’ve been discussing this terminal pattern for several weeks now. It’s the intersection of ascending channel support from the March low and trend line resistance from the 2014 high.

Here’s the view from the weekly time frame:

GBPUSD weekly chart showing trend line and channel

It was actually the intersection of channel resistance and the 2014 trend line that triggered the selloff in late September. Given that the GBPUSD is still trading well within these confines, there isn’t enough evidence from a technical perspective to call it one way or the other.

So, regardless of the price action that results from tomorrow’s BOE decision, I’ll remain on the sideline. I don’t want to get caught up in the volatility nor do I see a technical environment conducive to follow through.

For that to change, the pair either needs to close above the 2014 trend line near 1.3440 or below 1.3100. Those are, of course, moving targets given the diagonal nature of the levels in question.

I still maintain the idea that a break from this terminal pattern will set the stage for 2018. It could very well be the turning point for the next leg lower or the catalyst for a continuation of the 2017 rally. Either way, something worthwhile is on the horizon.

Get Free Forex Trade Setups Delivered To Your Inbox! Click Here To Get Alerts

GBPUSD terminal pattern on the daily chart

Leave a Comment:

9 comments
tolu says

yeah, i noticed this etu on my chart too.

Reply
Tom says

Hi Justin i have been following for a little while now and i think you are great. i am still on the demo. What do think of pivot points at the moment i am using them with price action lines?

Reply
    Justin Bennett says

    Hi Tom, I don’t use pivot points.

    Reply
Shibukumar says

1300pips loe

Reply
tony says

GOD send you to tell us the trueth about forex and bless people with it .MAY YOUR DAYS BE LONG

Reply
Mark says

What I hate about market is that sometimes it has a very strange behavior…Yesterday BoE raises interest rate to 0.5% but GBP crash instead to raise…Justin can you give some explanation about this? Very annoynig…

Reply
    Rizwan Sadiq says

    Mark. i would like to say you that. sometimes market moves against news.but after that market will create strong setup for long term..i suggest you don not trade on news timing.and find price action setups after the news.

    Reply
      Mark says

      Hi Rizwan, thanks for your tips…yes I know that but sometimes you are already in position some days before the news and while you expect a positive outcome due the news data the annoying thing is that you have to suffer a drawdown because the market is going in the opposite direction and you are always in doubts if to exit or if to hold on the floating loss hoping it turn in your side… For example interest rate is raised at 0.5% for GBP and Yen have negative interest rate….I would expect a long for GBPJPY but right now I see only a short scenario from what the chart developed on the last week… VERY CONFUSING!

      Reply
      Mpho says

      “In theory, an interest rate rise should have been positive for the pound… Last Thursday (02 Nov 2017), the pound fell, turning the investment textbook on its head. Yes, the interest rate decision was risen from 0.25 -> 0.50 but the commentary from the central bank of England was negative.

      The minutes from the MPC’s meeting indicated that the central bank of England is in “no hurry to raise interest rates again and that further increases will be limited.”

      Reply
Add Your Reply