Trade of the Day: GBP/USD
By: Dima Chernovolov
GBP/USD continues to fall inside the 30-minute Down Channel chart pattern which was identified recently by Autochartist. Autochartist rates the quality of this Down Channel at the 7-bar level – which is the result of the medium Initial Trend (5 bars), strong Uniformity (8 bars) and higher Clarity (9 bars). GBP/USD is expected to fall further inside Down Channel – in line with the earlier downward reversal from the resistance area shown below.
As can be seen from the daily GBP/USD chart below, the price earlier reversed down from the resistance area lying between the resistance level 1.2970 (which stopped the previous upward correction at the end of October) and the upper daily Bollinger Band. The proximity of this resistance zone and the clear bearish divergence on the daily Stochastic indicator increase the probability GBP/USD will continue to fall inside this Down Channel.