Gold 1735,43
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EURUSD 1,1821
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DJIA 32405,50
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OIL.WTI 59,87
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DAX 14565,50
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Of course we are talking about the GBP/USD. It is out of the corridor it has been in for the last few months. Which we have written about several times before. Below is a chart which you have already seen several times in its unchanged form.
GBP/USD
In a newsletter to our clients a week ago we wrote the following:
“What is the main risk of this scenario (continued upside in the channel)? It is that the upward movement within this channel on the daily chart has been going on for about 5 months. This is a very strong trend that only extremely lazy traders have not identified.
From an “evil market” point of view, of course, one wants to break the channel with a sharp move down and take off a large number of stops.”
Which is exactly what happened on Tuesday and Wednesday. The attentive reader will ask the question. Why are we talking about Tuesday and Wednesday if the breakout occurred on Tuesday? On the chart we are using a daily timeframe. From the point of view of classical technical analysis, it is not enough for the price to simply break through the channel. It has to close below it (which happened on Tuesday) and better yet, we should get a confirmation the next day (we got it on Wednesday) that the price did not immediately reverse and break back into the channel.
Now we look at the chart. There are two possible developments:
1. If the breakdown is not false, then from the TA point of view, the Pound/Dollar pair is in for a real disaster. The daily chart does not show a support level. Perhaps the nearest one is the horizontal line at 1.285. From this level the price has pushed back several times before. And this is the potential for a 9 figure drop
2. From a long-term trend and “evil market” perspective, the price should return back to the rising channel after some time. Fundamentally, we maintain our forecast for the Pound/Dollar pair at 1.50 for the end of the year. And the ‘angry market’ is very keen to retake the stops. This time, those traders who went short on the breakdown of the channel
09.30 Swiss National Bank interest rate decision
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