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.
RISK DISCLOSURE: Trading foreign exchange (FX) and contracts for difference (CFD) on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in FX or CFDs you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with leveraged trading and seek advice from an independent financial advisor if you have any doubts.