British Pound has been trying to turn around for couple of week. To date, results have not been very impressive. As soon as the currency makes some progress, it gets pushed right back down. Such was the case last week, when I took few trades betting on GBP recovery. Outcome was mixed, but I keep testing chart patterns which show some promise for reversal. Slowly, Sterling is getting positive news. Nothing explosive to be sure, yet enough for fairly sharp, good size moves like today.

Following good beast trade yesterday, I paid more attention to GBP-CHF. Hourly chart formed very nice reversal formation, with multiple resistance points, suitable for high probability breakout. Chart didn’t present huge objective. Next resistance was at 1.6060, about 95 pips away from my entry. Given a little wider spread this cross has, and possibility of the move stopping at next resistance, I settled for an objective of 80 pips.

I liked this transaction. At the same time EUR-GBP was under observation. It also moved, but since chart didn’t form a set up as neat as the one above, I decided to pass. No trade. But there might be one now. Perhaps not right away, however, next swing down could easily happen over next couple of days. For this 4H chart is used.

New sell order is placed at 0.8876, looking for a breakout under this double pronged support. Ideally, I would like see a bounce here to about 0.8950-60, where another sell might be placed. I haven’t made up my mind on that yet, will have to watch the charts for reversal patterns. Main trade here, though, is the the above mentioned short, which has a target of 100 pips. Let’s hope that GBP can stage a rally lasting longer than one day, as it has been the norm so far.

Mike K.