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GBP/USD Lackluster Ahead Of Data

GBP/USD Lackluster Ahead Of Data

In this edition of DecaPip Daily I would like to take a closer look at the GBP/USD as we approach Thursday which has no less than six high impact data releases on the same day and then shortly after a highly anticipated speech from BOE Governor Carney.

From a traders perspective they will be listening intently to the Carney speech for hints as to whether the BOE may hike it’s interest rates any time soon. Traders will also be waiting for any changes on the MPC voting stance.

With this is mind and given how GBP/USD has been lackluster in finding a clear direction lately, seemingly selling off from the daily high points and buyers stepping in at the bottom of the daily ranges, it is advisable for us to take a look back at a higher time frame chart for key historical levels should we get some good movement Thursday.

For me, this weekly chart below is the most important GBP/USD chart.

GBP/USD Weekly Chart

We can see it is essentially trapped between a longer time frame wedge formation on the weekly chart and a heavily inclining recent support below.The top line at 1.5734/5 is really the key level here for the upside and if we see a higher time frame close above this area traders may buy into it heavily.

If we, however, break to the downside and go below 1.5570 support it may encourage sellers to try to take it lower to the bottom of the wedge pattern at 1.5250. Realistically, ahead of Thursday, how much follow through we get on these moves is certainly debatable as real money may be on the side lines waiting for the relevant data points to be released.

Below we can see a more recent GBP/USD chart on the daily time frame.

GBP/USD Daily Chart

This really depicts more wedge formations and even a triangle formation so we can expect the break when it comes to be substantial on GBP/USD as these patterns tend to really explode in the intended direction when they do break.

For me the best way to trade this is simply to watch the 1.5666 level to see how it holds and any break will probably lead us into the 1.5734.35, which needs to hold firm.

For a buy entry 1.5250 is the most attractive which, however, seems rather far away at present.On Thursday I would be cautious on the news spikes in either direction especially if we are trading close to the aforementioned levels.

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