Weakening Dollar Sets up British Pound for 1.6017 Test

It looks like the GBP USD survived its recent break and isnow poised to move higher. The chart pattern indicates there is enough upsidemomentum to challenge the most recent swing top at 1.6017.

It looks like the GBP USD survived its recent break and isnow poised to move higher. The chart pattern indicates there is enough upsidemomentum to challenge the most recent swing top at 1.6017.

Early in the session on Wednesday the Sterling felt a little pressure after asecond consecutive monthly rise in unemployment claims was reported. Inaddition, the broader measured employment rate slipped 0.1% to 7.7% in theJune-August period.

Traders ignored this news, instead deciding to focus on theplight of the Dollar and next action by the U.S. Federal Reserve to stimulatethe economy. Upside momentum built throughout the day once traders decided tocommit to the long-side in anticipation of the new Fed quantitative easingprogram.

Technically, the main trend is up on the daily chart. Thecurrent main bottom and trend change level is 1.5669. Another higher-high daywill make 1.5754 a new higher swing bottom.

The key to sustaining the current rally is holding above anuptrending Gann angle from the 1.5296 bottom at 1.5836. This angle was testedearlier in the week, but the Cable survived the test.

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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