Within trading range (2011-04-12 GBP/USD analysis)

Hang Seng Index was down 0.38% yesterday, which was a slight drop due to the strong resistance I mentioned in previous post. European and US markets both did not change much, we can see that investors are standing back before having clear image about the world economy.

So today I'm going to talk a bit on forex.



Above is the daily chart of GBP/USD. I have identified a diverge triangle which the pounds have been following for four months.

Now, the price has reached the upper line, and it has great chance to fall back to the lower line, which is actually a pretty large range.

I don't expect GBP would break out the triangle without significant economic data supporting. Therefore, slumping would be more likely this time.

The support is provided by both the short-term and long-term trendlines, at around 1.593. This level is a very strong one so breakdown of triangle is not likely too.

Therefore, the British Pound is still in the trading range for the coming week. Especially if it drops to 1.593, we could LONG it to grab the profits from 1.593 to 1.65, which is pretty big profit.