Intraday Cable Continuation Expected

The 15-minute GBP/USD’s short-term intraday chart indicates that strong near-term resistance is waiting for any bulls thinking about rallying this pair higher through 1.5300 during the coming week. An Ascending Triangle formed when prices squeezed into the narrowing range, with strong resistance showing between 1.5315 (R1) and 1.5304 (R2). Current support is steady at 1.5273 (S1), as well as at the uptrend line support just seven pips above this level, at 1.5280 (S2).

4-30-2010 4-41-48 PM.jpg

Note the strong Initial Trend reading – ten bars – that accompanies this pattern alert. This does not necessarily indicate the sideways market cycle normally expected of Triangle patterns – what is most interesting is that the pattern developed not only on a short-term, 15-minute time frame, but also within a Length of just 21 candles. This suggests that this correction is a pause in the intraday pullback from the high at 1.5390, and also means that the dominating trend is heading down, despite the fact that prices stalled as the weekend (and therefore the close of the week’s trading) approached.

The strong resistance at, and just above 1.5300, as well as the downtrending strength suggests that this Ascending Triangle will set up a continuation of the sell-off should prices break lower through the uptrend line at 1.5280 and support at 1.5273 (S1).

Charts courtesy of Autochartist

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