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Looking for short-term setups after the Fed’s decision? How about this short-term downtrend on GBP/USD? Here’s the forex setup that I’m watching!

As you can see on the chart below, GBP/USD is fast approaching the 1.3100 major psychological handle. It’s a hair’s breadth away from not only the top weekly ATR, but also the 200 SMA and falling channel resistance on the 1-hour time frame!

GBP/USD: 1-hour Forex Chart
GBP/USD: 1-hour Forex Chart

Fundamentally I’m thinking that the dollar will soon regain its legs against its major counterparts. After all, there now more hawks in the FOMC than there was last month. Not only that, but Janet Yellen also hinted that ALL meetings are “live” depending on economic data. Meanwhile the pound will likely continue its downtrends especially if more post-Brexit economic reports disappoint market expectations.

I got pretty burned from my last GBP/USD so I think I’ll wait a bit before jumping on this one. I’m hoping to short around the 200 SMA levels as soon as I see exhaustion candles around the area.

What do you think of this setup? Do you think the pound will go back to its downtrend some time in the next couple of sessions? More importantly, will the dollar continue to lose ground or will it see reversals against its higher-yielding counterparts?

Don’t be shy to let us know what you think! 🙂

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