Today we will analyse the trend of the British Pound.
The chart below shows a monthly view of GBPUSD with Advanced GET XTL price action. Currently XTL is black suggesting price is devoid of a decent trend and the market noise is excessive. Price also has been range bound over a few years. Of course within the wide monthly consolidation, there have been some very good daily trends we have traded but the bigger picture is sideways.
The numbers in black represent the Elliott Wave count. If this is assumed to be correct, we have a wave 5 to come. However, price being our main indicator shows that currently it is resting at a common sense trendline. This means it has support but a break of this could establish further selling of Cable. Sometimes a catalyst is required so any UK downgrade or Pound negative news could provide that.
Looking further at technicals, Advanced Get Stochastic shows a bearish False Bar and since then, the indicator has been in its element positioning itself quite accurately for the peaks and troughs of the price consolidation. Based on that history, Stochastic is once again overbought suggesting weakness to come. Again, price being our main indicator, we want to see a breach of support before a possible long term continuation pattern can be confidently traded.
If price does breakdown then we want to be prepared for a trading opportunity.
Good trend trading…