Looking back at the Weekly chart, we can see the continuous red bars since the June 2014 high. We saw price plot an indecision candle at the high of 2013 (represented by the pink line) before further weakness to the weekly 200MA and figure 1.6000 major support zone. We now need confirmation of either a break or close below this support level and a continuation of this Bear revival or a bounce to the upside and movement back in the direction of the long-term Bull trend. If we do see a break and close below 1.6000 then we can expect price to target 1.5000 and the low of 2013.

Below is the daily time frame, which we can use to engage in a more detailed picture of price action. The daily 200MA is used to give trend traders a bias in price action. When price is above the daily 200MA, we look for long opportunities and below we look to go short. Price is trading below the daily 200MA suggesting a Bearish bias to price.

TECHNICAL ANALYSIS GBPUSD Weakening But For How Long Cable daily

As price is currently set up, we need to apply patience and wait for price to dictate what action to take next. Price is facing immediate support suggesting a possible bounce at the weekly 200MA and 1.6000 support zone. On the daily, conflictingly we have price giving us a bearish bias as it is below the daily 200MA with continuous red XTL bars suggesting weakness. At this stage, we need to go into capital protection mode on this pair and stand aside for now.

A key element to trading is patience and letting the set up come to you. If price breaks and closes below support then we can start looking for short set ups. How you enter will depend on how aggressive you are. A break is usually followed by a retest of the support-turned-resistance level. The next break down will be the conservative approach. For long opportunities, the wait will be longer with price needing to break back above 1.7000 and the June 2014 high before we can enter.

As a reminder, this analysis is from the perspective of a long term trend trader. Intraday traders will have a different approach. I have an extensive portfolio and so while I wait for the GBPUSD to mature and offer the right setup, I have my eye on more lucrative opportunities in both Forex and Stocks. Trends move from pair to pair and stock to stock and a good trader knows where to risk his money for the best rewards.

My stance at the time of writing this is simply to stand aside and trade the other trends in play such as the USDJPY and the USDCHF in Forex and MAR and LUV in Stocks until price action on the GBPUSD dictates otherwise.

As I am sure you know but just a reminder; the only friend in trading is the trend. 

Zaheer Anwari
Founder & Trend Trader at