Daily Price Action

GBPUSD Wedge Pattern to Reignite Short Interest


I haven’t been a big fan of trading the GBPUSD in 2016, mostly due to the June 24th Brexit vote which caused a lot of volatility both before and after the event.

However, a wedge pattern appears to be developing on the 4-hour chart that could prove worthwhile over the coming sessions. Of course, given the broader downtrend that’s been in place since mid-2014 I’m only interested in selling opportunities.

A 4-hour close above the 1.2330 handle would negate the pattern. With that said, buyers wouldn’t likely get very far considering a parallel can also be drawn from wedge support which would act as resistance and possibly carve out a bear flag.

As of right now, I’ll be watching for a 4-hour close below wedge support which currently sits near 1.2190. A move below this level would expose the October 7th flash crash low and critical support level at 1.2000.

Aside from BOE Governor Carney’s speech on Tuesday at 10:35 am EST, Thursday looks to be the most eventful day for the pair. At 4:30 am EST we have UK prelim GDP for Q3 followed by US core durable goods orders and unemployment claims at 8:30 am EST.

Do keep in mind that the US also reports advance Q3 GDP at 8:30 am EST on Friday, which should be of considerable interest given the rampant speculation about the health of the US economy in recent months.

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GBPUSD wedge pattern

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