GBPUSD Trade Beginning to Align for Election Thursday

The trades for week are beginning to take more definite shape, although matters are still far from clear. The most likely current player that will take shape soon is GBPUSD, as clearly seen from its daily chart in Figure 1.

Figure 1: GBPUSD Daily Chart – Broken Channel Being Retested

Price has recently broken a rising channel, and price has since been creeping up along its underside in a choppy retest. Should this retest fail, then a short trade would well be in order. The question, of course, is when this short would be viable.

Figure 2: GBPUSD Four-Hourly: The Blue Box

Statistical sampling and pattern recognition on the four-hourly chart suggest that the rising wedge pattern may well terminate in the 1.2956-1.3012 zone. Once price rises to touch this Box, traders might choose to enter trades on bearish candlestick patterns, reversal patterns, trendline breaks, or stochastic (8, 2, 2) reversals with breakout confirmation.

This is still early in the week, and trading should be tentative and cautious, with defensive trade management, as there are likely to be many surprises yet lurking just around the corner.