Keep an eye on GBP

Good Morning Dynamic Traders

Hope you've all had a great start to the trading week.

I would like to take a look at the GBP which has been off our radar for a while as price has been consolidating for some time.

This pair featured a lot in previous blogs, but it would be good to have a recap. So let's take a quick look at the weekly timeframe to get an overall picture of what's been happening. We can see price took a heavy fall last year and bottomed at around the 1.35 mark. Since then price has been steadily climbing up and after breaking above the psychological 1.50 figure, continued up with strength. Price is now in proximity of the VI which is also clustered with the figure and a fib breather level. This has given price a very strong resistance barrier to contend with. Note the extreme candle we have on the chart and also check the RSI which has recently broken it's TL.












Now looking at the daily chart we can see that the past few months price has simply been consolidating. We also know that usually after a long consolidation, comes a big move. So is this the end of the ranging period? We can see that price has broken below the VI, suggesting the bears are starting to take back control. But we would need more confirmation than just that - we still have the previous low/S zone to break and as SM swing traders we would want to see price breakthrough this area before any action is taken.













But price could simply bounce back up and continue with the ranging pattern, or we may see further strength to the down side. Should this happen, be sure to use ESLT on the BOB to avoid any FBO's. Most importantly, wait for the market to make it's move - there's no room for second guessing in successful trading!

Please ensure you carry out your own analysis.

Here's to great trading!

Sonia Molina