Throughout most of November and December GBP/USD played within a rough 200 pip range with a narrower 100 odd pip range. We’re doing the same thing in the early part of the new year as the market remains undecided about the next direction.
GBP/USD H4 chart 21 01 2015
The defining levels are clearly drawn out and trading the edges is the way to play it at the moment. Break the upper end at 1.5273 and the 1.5319 level becomes the last line in the sand and a viable stop point. Break below 1.5050 and the big psychological 1.50 area becomes the lower bound and a place to park a stop just under. At the moment, 1.5050-1.52 is the tighter internal range.
Confirmation of a break of these levels comes by watching how they react to a test after and then the break can be traded with more confidence.
