GBP/USD 4H Chart: Emerging Pattern: Broadening Wedge

GBP/USD has formed a Broadening Wedge pattern on 4H chart. The pattern has 45% quality and 74% magnitude in the 140-bar period.

The pattern started when the pair bounced from 1.5637. Currently the pair is trading at 1.6177. Gap between pattern's support and resistance broadens by 87 pips in 100 bar period. Technical indicators on aggregate point at appreciation of the pair on 1D time horizon suggesting that upward sloping trend will maintain. Long traders could focus on daily pivot (S1)/Bollinger's band at 0.6188/94, daily pivot (PP)/20 bar SMA at 1.6230/34, Bollinger's band/daily pivot (R1)/pattern's high at 1.6274/75, daily pivot (R2) at 1.6316 and daily pivot (R3)/pattern's resistance at 1.6360.

Technical indicators on aggregate point at depreciation of the pair on 4H time horizon suggesting that the pair will continue to move towards pattern's support. The SWFX market sentiment is bearish as 71% of traders hold short positions on the pair. Short traders could focus on Fibonacci (23.6% of move since 28th of August)/daily pivot (S2) at 1.6152/44, daily pivot (S3) at 1.6102 and Fibonacci (38.2%) at 1.6076 and, if pair maintains same momentum, at pattern's support at 1.6038.

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