The weekly and the daily chart is where I look for alignment in the trend. I want to see price trading below the weekly 200sma and the daily 200sma to suggest a further bearish bias in the trend. Looking at the weekly and daily charts below, we can see that we do have alignment, adding further confirmation to take shoring positions.

The Cable, GBPUSD, Currency Analysis, fx trader, forex weeklyGBP/USD Weekly chart

The Cable, GBPUSD, Currency Analysis, fx trader, forex dailyGBP/USD Daily chat

This currency offered short entries below 1.4000 on the release of Brexit but the trend has failed to gather any momentum. The daily chart shows the clear consolidation price has been in since July. This is hardly surprising as the markets tend to consolidate over the summer months. In addition, price before the release of Brexit was in a consolidation. The market tends to revert back to what price was doing after the release of major news items. Another good example of this is the EURCHF after the SNB removed the peg at 1.2000 last year.

The overall picture still suggests further weakness but until the drawn in pivot support level is cleared, trend traders will be standing aside and simply managing open positions.

Patience is a key trait of a top trader and this is certainly testing our patience but patience is handsomely rewarded. Let the trade come to you.

Zaheer Anwari
Founder & Trend Trader at
The Traders’ Cosmos