October 28, 2009
Watch For A Breakout On The GBP/USD Pair
Since the big downward move last Friday the GBP/USD pair has been very quiet. In fact if you look at the 4 hour chart you can see that it's been stuck in a narrow trading range for several days now. Therefore the longer this continues, the more likely it is that we are going to see a big breakout, either upwards or downwards.
I'm personally hoping it will break upwards because everything's in place for a decent trading opportunity. For example the Supertrend indicator is green on the daily chart (indicating a bullish trend), the EMA (5) is below the EMA (20) ready to cross upwards, and the price is still around 360 points below the most recent high so there's plenty of upside potential.
If it breaks downwards then I shall just sit on my hands for a while because I don't like trading against the trend. However I can't see the price moving below 1.5991 (which is the current Supertrend level that would indicate a new downward trend) so I'm sure an upward EMA crossover is just around the corner whatever happens.