Greetings and thanks for reading. What a great week this has been! 🙂 Without volatility there are no pips to be made, and we sure had pips to make this past week.

After studying the longer term GBPUSD charts, history, and news events, I felt it was timely to share some of my thoughts on this currency pair. Let’s begin with this daily chart below:


As you can see we have made a relatively large move up this past week. If we apply a simple A=B / B=C scenario, this would put us near the first level of resistance shown on the chart, around 1.6680’s or so. I have put a few other areas of strong resistance on this chart in the event we get there in the near future. These 3 levels are, in my opinion, the highest areas of potential resistance on the daily time frame.

Next, let’s take a look at the bearish divergence setup on the 4 hour and 15 minute charts below:



Pay special attention to the rising price level, together with the falling MACD and overbought Stochastics. These two items, aligned on the 4 hour and 15 minute chart, can often be a strong sign of an imminent pullback in the near future. Although the fundamentals of the GBP and USD are not showing drastic signs of a pullback currently, a 23.6 fib level on the 4 hour would bring us back to the 1.5800 level on the short side. Clearly, this is a long, nearly 400 pip move south, but sometimes the charts tell the story better than the overall market sentiment…as we all know. My overall bias on this pair is neutral until further chart action plays out. We have a large news event coming early Monday AM here in the states that may shake things up to decide the direction a little more reliably:


Here are two of the larger news events for the GBP last week, courtesy of ForexFactory:



As for this week, clearly the weakness of the USD will be a huge factor as it has been in the past. By knowing a little more about the longer term trends, support and resistance levels, and news bias, we can better shape our personal bias for longer term setups or for taking scalps in the direction of that bias. We are putting the finishing touches on our live forex trade room and much more so be sure to stop by and join our free mailing list. Happy trading to you all and remember to keep the risk levels low and the reward levels high. 😉

Until next time,

Jason Gospodarek