Autumn Express GBP/USD
Updated
Trading Plan:
- Short Term: Sell until 1.2690, TP at 1.2681, SL 1.3050
Short Term: Buy below 1.2681, TP1 1.2800, TP2 1.2850
Long Term: Sell, TP at 1.2022
Note
The cable has been in a free fall since April but developed a downtrend channel in June and so has been making lower highs and lower lows all summer. It seems it likes to break the limits of the channels it glides on, but usually spends months inside. The last channel, for example, was completed in one year and 6 months. The current one, on the other hand, is 4 months old only, not counting the candles that are part of the previous channel. If the odds are in favor of the dollar, then traders may anticipate the pound to hit the horizontal support line at 1.2000.For now, the price reached the upper limit of the Bollinger Bands (daily chart) and the second weekly resistance at 1.3044 last Thursday. It hit, at the same time, the upper limit of the downtrend channel but made a U-turn on the following day. The price action is in a regular bullish divergence but overbought on Stoch (~80) and with RSI (~51) headed downwards. The 4h chart, however, is in the effect of a regular bearish divergence with Stoch lines entering the oversold area. The price can, therefore, spend a few days in the oversold area and so descend towards the lower limit of the channel.
Monday, Tuesday, and Thursday bring key British data releases. Manufacturing Production (MoM) (July), Unemployment Rate and Claimant Count Change (Aug), and the most important, the BoE Interest Rate Decision. Lots of volatility is expected, and if the interest rates remain unchanged then a major dip could happen on Thursday. The political clime, by comparison, is offering more downs than ups in respect to Brexit project, while the dollar is constantly boosted by the USA strong economy.
It is unreal to believe that the pound will strengthen this week, and if the price bottoms again in the 1.2000 area then traders have 1000 pips to short for. The chart below presents the monthly channel colored in violet and the daily channel colored in orange. There is also a dashed brick red trendline which might act as resistance in the event the price makes a breakout North. This week major support, in my opinion, will be 1.2681 again. Eventually, the odds are clear.
Note
BoE Interest Rate Decision is scheduled on the 13th of September.Order cancelled
The trend has changed, the pair is headed up. See for details: 
Trade active
The price is back into the downtrend channel!
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