Today let's see Forex.
Above is the 4-Hour chart of GBP/USD. Since mid-August, sterling has been moving under downwards channel, pared the gains it got due to the extremely weak USD.
The pounds reached around 1.662 in mid-August, and plunged to around 1.591 this week, probably due to CHF pegging to EUR.
So what we could find on the chart is that the 20 Simple Moving Average was acting quite well to resist the price of sterling. GBP tried three times and failed to break out.
However, interestingly, this bullish force was getting stronger. In each trial, sterling was getting above the SMA more than that in previous trial. Though it still failed, I expect that it would be almost time for break out.
Secondly, 1.591 seems to be a very strong supporting level. The price retested this level just a short period after the first test in September, and this level still stood. This might indicate bottoming of GBP.
Thirdly, MACD and its EMA showed a bullish cross few hours ago. MACD has been sliding for long time and is currently at very low level. This cross might help MACD surge which signals boost of sterling as well.
So currently GBP is being resisted by the 10-SMA. What we have to do now is to wait until it breaks out again the 10-SMA (which should not be a problem), and we can LONG GBP.
20-SMA is the next resistant (at around 1.60). But as I predict break out of 20-SMA too, target should be 50-SMA instead (at around 1.614).
For the downside, break down of the previous low (1.591) would mean GBP continuing its bearish trend and would reach its previous low in July at 1.578.
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