GBP USD Recovers into Close; Needs to Hold Gann Angle to Sustain Rally

The GBP USD was under pressure most of the trading sessionon Tuesday, but recovered into the close to finish off the low.

The GBP USD was under pressure most of the trading sessionon Tuesday, but recovered into the close to finish off the low.

The early weakness in the Sterling was caused by a government reportstating that British consumer prices were steady in September. This report didlittle to clarify whether the Bank of England will undertake another round ofquantitative easing to boost a slowing economy.

Earlier in the month on October 7, the BoE refrained fromincreasing QE, opting instead to continue to monitor the economic indicators.Since Tuesday’s report was inline with expectations, nothing can be concludedat this time regarding the central bank’s next move.

The Cable recovered late in the trading session after theU.S. Federal Reserve minutes hinted strongly that the central bank would actsooner than previously estimated when implementing another round ofquantitative easing. This pair closed lower, but the late intraday rally gave aslight ray of hope for the bulls.

Technically the key to sustaining the uptrend in the BritishPound is an uptrending Gann angle at 1.5816. The market has held this angle assupport since the bottom at 1.5296. This pair traded through this angle but recoveredit late. If it can regain this angle then it may have a chance to embark onanother upward swing.

According to the daily swing chart, the main trend is upunless the last swing bottom at 1.5669 is violated. Based on the last swingfrom 1.5669 to 1.6017, traders may try to establish support inside of aretracement zone at 1.5843 to 1.5802.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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