Good afternoon traders,
After GBP/USD found support after rolling over, price has continued to rip higher through through range resistance.
But taking a look at the current Cable daily chart, we can see that the range breakout hasn’t seen any momentum behind it and a reversal pattern might instead be forming:
While price has gone through how I drew the range top resistance line, if you look at the price action from the post-Brexit fallout on that chart, you can see that depending how you drew the line, the resistance ZONE could still be holding.
The higher the time frame, the more likely support/resistance is to be a zone rather than a hard level. This is just simply because when bigger orders are going through, they are accumulating close to a level, but never going all the way through in the one hit.
With this latest daily candle that I’ve marked with an X looking mighty bearish, looking to sell short term rallies back into resistance could well be an interesting strategy to take advantage.
Best of probabilities to you!
Dane Williams – Vantage FX
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Source: Vantage FX Blog