BabyPips.com FX-Men Team
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GBP/USD: 4-hour
Careful, pound bears! The range support on Cable’s 4-hour forex chart seems to be holding as a floor, with a bullish divergence already in play. See how price formed lower lows while stochastic drew higher lows? This suggests that a bounce back to the top of the range at the 1.5820 level or at least until the mid-range area of interest at 1.5450 is possible. However, the 100 SMA is below the 200 SMA and isn’t showing any intention of making an upward crossover anytime soon, suggesting that the path of least resistance is to the downside. In that case, a downside break could still take place, likely pushing GBP/USD down by around 600-650 pips, which is roughly the same height as the range formation. Don’t forget to review our lesson on How to Trade Breakouts if you’re thinking of shorting!
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