By: Doug Rosen
The GBP/USD was certainly the King of the Hill yesterday. When many of the major pairs only moved a fraction of their daily ranges the GBP/USD still made a 104 pip range, just a few pips below its average day. I have to admit, I was right once again (but then again, how often am I wrong) when I stated that this pair was in for a rally because it made a decent rally and it was a truly bullish day for this pair considering price only closed 35 pips below the high. Is price still heading up? Yes it is. It still needs to connect with the daily 55 ema about 30 pips north from where it is at this moment and as I said yesterday, it will probably go all the way up to 1.5775 where at that point, it will have to make a decision. My speculation says price will reach that level and tank since that will be an undeniable quad top.
Looking at the 4 hour timeframe it is obvious that price is in a range and interesting enough price is at a 50.0 fib overlapped with a 233 ema and weekly M3 pivot at 1.5678 which is probably what has been keeping price down for the past 24 hours.
Moving on to the hourly timeframe price is above what could be viewed as support at 1.5647 which has previously acted as resistance and happens to be the hourly 55 ema. This level confirms to me that price will more than likely head up since role reversal areas can be very, very powerful as also the 55 ema is a very powerful ema.
At the moment this pair is not so tradeable since the Bollinger bands are very narrow and I don't enter positions within narrow bands. Based on my analysis, be careful and maintain a bullish bias based on today's analysis and review the analysis I posted yesterday for this pair since e it still applies.
