Rail Road Tracks in gbp/usd

Monday price action in gbp/usd has been as it usually is. If you monitor how currencies move at specific days of the week, how they open and close, you will surely notice some tendencies. This week was no exception. We saw directional moves during the past week as the cable rose against US dollar for the whole week. The tendency continued on Sunday open. You need to know that in most cases if there was a directional move previous week and market ended moving in that direction you are going to see a reversal on Monday. 

As always there was a false move up during early European session (during Frankfurt open) and the move upwards continued till the start of London session. Market then formed rail road tracks candle pattern and reversed sharply to the downside. I expect some ranging today and possibly tomorrow and then a direction to form. 

There are some important fundamental releases this week, the key one being FED Open Market Committee Rate Decision at 18:00 GMT on Thursday. I doubt if we are going to see anything significant happening before that date, but you should watch UK Consumer Price Index release at 08:30 GMT tomorrow and UK Unemployment change at the same time as CPI on Wednesday. 

Gold Reverses at Resistance

On the 20^th of July Gold found its’ bottom after falling sharply for around a month. You can see that from that moment on the commodity has been going up in waves by forming bases and then rising further forming another base. There have actually been three levels of rise. Resistance of the first level was at 1110, resistance of the second base at: 1127 and finally the security reversed at 1170 forming two peaks. The first peak formed railroad track pattern (bullish candle up and then the next one down engulfing the bullish candle). The second peak represents a failed attempt of breakout of previous high. Gold managed to break above the first high by around 1.5 dollar per ounce before collapsing to the first level of support at 1145. 

Railroad tracks and a bearish pin on 4 hour chart at resistance indicate that short term bullish trend is over and now gold price will head lower. Looking forward to next week we may state that resistance is now at 1145, where previous support was (according to rules of classical technical analysis). Support can be seen at 1125, 1120 and 1110 levels. I see 1110 as the strongest one and it will probably hold for next week. However, attempts to go above 1145 will probably fail and if one sees a bearish candle formation at that level, it will be a good signal to go short. 

Momentum: Bearish

Intermediate trend: Neutral