ForexPros Daily Analysis July 21, 2011
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Higher-lows pattern in GBP/USD
The pound resumed strengthening against the USD, and made a “higher-lows” pattern (blue lines). The MPC meeting minutes was publish yesterday, and showed no change in the vote about the interest rate. Today is publishing the private sector net borrowing, which expected to be lower than the previous data, so the GBP might get a negative momentum. The British retails sales are publish today as well.
On the technical aspect, the pound made a positive pattern that increases the chances for more risings. The 200 SMA supports the GBP at 1.604-1.605. The nearest resistance is at 1.62, and strong break-up there can launch the pound to 1.64.
The Japanese currency is about to break the “bear-flag” pattern in the daily chart of the USD/JPY, but the strengthening of the pound makes the GBP/JPY to stamp. The triangle pattern, which I analyzed on Tuesday, still appears, but the direction will be determined according to the way those currencies trade against the USD. A break-up of 128 can take the pound to 130, whereas a break-down of the lower edge of the triangle at 126.5, can slide to 125.
Forex Trading Analysis written by Bastian Rubben for ForexPros. For more information about forex news visit ForexPros.
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