GBP/USD, August 13, 7pm UK Time – Longer term analysis

 The chart below is an analysis based on the daily cable chart. After GBP/USD failed to break 1.6, we saw, for whatever unlogical reason, strength coming into the USD and a 400 pip pullback to 1.56, each day following a similar scheme. We opened London with a double top, only to give away 100 pips during the session. Same happened during the US sessions, but now we have found stronger support levels. A confluence of recent highs (red line), the up trend-line (yellow) and a 50% Fib line will make it hard for cable to clearly break the 1.54-1.55 level. If the next daily candles don’t support a further down-trend, we will form a bullish divergence on the Oscillating indicator (light blue trend line in the indicator section) and could see daily stochs turn around to the bull side as well.

What I want to say is: Look for Cable longs in the 1.55 (aggressive), 1.54 (conservative area) if the indicators turn around.

The second chart is an analysis of H1 GBPUSD, which already shows a confirmed bullish divergence on the Oscillating indicator and bullish Stochastics in the H1 time frame. Let’s see if the daily is game and finally attack 1.6-1.62. Merwins words and reality are, as usual, long forgotten…

GBP/USD, August 13 7pm UK Time, Daily

GBP/USD, August 13, 7pm UK Time