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QUICK TECHNICAL TRADE ANALYSIS: GBP/USD

QUICK 1:1 TECHNICAL TRADE INVERSE HEAD AND SHOULDER PATTERN

WITH THE HELP OF THE DOVISH STATEMENTS PRESENTED BY JANET YELLEN DOLLAR WEAKNESS HAS CONTINUED PROVIDING FUEL TO THIS INVERSE HEAD AND SHOULDERS ON THE DAILY TIME FRAME.

WE COULD SEE THIS COMPLETE TODAY WITH A BREAK OF THE NECKLINE LEADING US TO WAIT FOR THE RE-TEST OF THE NECKLINE WITH SIGNIFICANT PRICE ACTION.

I TOOK THIS TRADE FROM THE PRICE ACTION ON THE 4HR TIME FRAME AND SOME TRADERS MIGHT THINK I SHOULD OF WAITED FOR THE CONFIRMATION OF THE HEAD AND SHOULDER PATTERN TO COMPLETE BEFORE CONSIDERING ENTERING THE TRADE. HOWEVER I BELIEVE WE HAVE TO BALANCE THE TECHNICALS WITH OTHER SOURCES.

I LIKE TO USE SOMETHING CALLED A SEASONAL CALENDAR. THIS BASICALLY SHOWS YOU WHAT PRICE HAS DONE IN THE CURRENCY PAIRS FOR THE LAST 10 YEARS. ACCORDING TO THIS GBP£ BOTTOMS OUT AROUND JANUARY/FEBRUARY. WITH THIS IN MIND AND OTHER FUNDAMENTAL SOURCES I TOOK THIS TRADE.

WE MAY NOT SEE THIS COMPLETE AT ALL. IT MAY REJECT THE NECKLINE. IF THAT HAPPENS THEN WE MOVE ON AND CONSIDER OUR OPTIONS BUT UNTIL THEN I WILL BUY THE GBP£ UNTIL THE TIME OF THE UK REFERENDUM ON BREXIT.