Autochartist Forecast

The GBP/USD has been a difficult pair to trade this week for many traders as it hasn't been moving with the EUR/USD.  Today's U.S. Dollar sell-off and Dow rally has the GBP/USD moving in a familiar way again.  The 30 minute chart formed a Continuation Rising Wedge.  This as prices moved higher and found near term buying support at the 1.6520 level and more recently at the 1.6550 level.

It's clear to see that prices have leveled off and are moving sideways. This is reflected in the low Initial Trend reading (IT).  The market cycle has not transitioned from the uptrend or yet confirmed a sideways market cycle (C).

This indecision is difficult to trade and two scenarios should be considered:

1)    A reversal may occur due to the low trend strength; and

2)    A sensible choice would be to patiently wait for another chart pattern update.  Look out for both an uptrend chart pattern (e.g. channel wedge), and a sideways formation (e.g. triangle or rectangle).  Once identified confirm which chart pattern to set up based on the market's direction.

For further information on this and other chart patterns visit www.autochartist.com