Sunday, August 16, 2015

British Pound bulls triumph on Frankfurt open

Pound rallied against US dollar on Frankfurt open. This is often the case when 6:00 GMT hits the clock. However, Frankfurt rallies are often known as Frankfurt fake outs. If you look at gbp/usd chart below you will see that reversal candle is also in formation. 

London open is due in 10 minutes and breakout may turn to be real. However, we need to see a push through 1.5700 level in order for a breakout to be confirmed. I would personally wait either for a reversal sign or for a continuation pattern set up. 

Stop loss orders should be tight. There is no major news that may rock the market, so if the move is real it will continue running on expectations for a rate hike from BOE in the nearest foreseeable future. 

Anyway, I do believe the picture will clear up before US session. Possibilities to buy the pair will increase if it dives below today’s Asian lows of 1.5640. Stronger intraday support is seen at 1.5625 level where 200 sma on 15 minute chart currently is. Intraday resistance is at an even number of 1.5700. Strong short term support is at 1.5580 where 200 sma on 1 hour is.

Possible Frankfurt fake out on 15 minute chart in gbp/usd 

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