My first post for today will show you the reasons to be short in GBP/USD along with its long and mid-term
We will see the Weekly,Daily and H4 charts all pointing bearish view for this pair - the best entry will be achieved on the H4 chart.
On the Weekly chart, we see that a Double Top formation has been confirmed recently with the top in the range's resistance.Price has already started dropping.
This provides us two reasons to short - Top of range and Double Top.
On the Daily chart we see that we are undergoing a correction in addition to the reasons provided for the Weekly chart.We have reached Fibo 50.0 but further continuation down is highly probable due to this being a Double Top.
The RSI is also turning down, supporting our short decision.
Next is the H4 chart where we see a opportunity to enter in accord with the bearish view of the higher charts.
On H4, the price has recently broken, re-tested and been rejected at the resistance of the down-trend channel and the range - meaning the price drop momentum is accelerating.The RSI is also down and the price holds below both its slower 200-period SMA and its faster (blue) SMA.
This provides a excellent opportunity to get in line with the higher-timeframe short view.
Our stop loss will be situated inside the broken range and channel and our target will be near the next support with a available extension 1 support level further down.
Fundamentally, today's economic data for the GBP has been dominated by the negative data from the
Manufacturing Production and Trade Balance - with only RICS House Price Balance data being more positive than expected.
There is one more news release at 4:00 PM - NIESR GDP Estimate.
Overall, I retain my view that the right direction for trading the GBP/USD is down.