We’ve got a potential double top formed at 1.6255/60 and 1.6220/25 keeps seeing resistance coming in before any attempts higher. The April 2011 resistance line is still holding, despite some false breakouts, and is providing ample profits for those who can endure the breaks above.
GBP/USD h4 chart 24 10 2013
The direction is still very much in the balance but the pound really needs to take out that double high or we are likely to see a sharp fall back towards that important 1.5880 level.
Pip wise it’s still a fairly low risk trade to sell against that April line and the highs, with a tight stop on a break, but if we get another move up there in short time then the chances of it breaking will be high.
Update: Thanks to reader Maverick for the reminder. We should perhaps be aware that the immediate downside may be limited due to the GDP release tomorrow. Expectations are for a Q3 read of +0.8% and a year on year read of 1.5% but plenty have been pumping up the recovery expectations and so the market could be looking for a higher number leading up to the release. That could mean that falls over the next few sessions will be met with decent buying.
