The range today is  only 60 pips. The average over the last two weeks is  about 100 pips. I am holding a bullish bias going into the Carney speech later, however, the charts are looking a little ugly for bulls.   In my experience trading the gbp/usd - I do not get intimidated by short term charts, if I am in a longer term trade, since this pair can be volatile at times.  Where does the pair have to stay below to keep the bears in control?  In our opinion, we would have to keep the 1.5156 as a ceiling.  Next level is the 1.5172 level - 50% of the day's trading range.   Next up, we have the 1.513.  As support, we have the  1.5085, as a key fib level and support.

If we stay below the 1.5133 area, then the bears may just get some confidence and increase their selling pressure. On the flip side, we are starting to build divergence and a new set of bulls may start to enter the equation with the go ahead from the Carney speech, either way, I will be watching.

Last nights Mortgage numbers came in better than expected. Overall the GBP is a currency pair that may be reacting to a rate hike soon, as the U.K. has alluded to this several times in the last 6 months. The markets do not seem to be paying much mind to the possible rate hike. Our research team, feels the rate hike may just catch many by surprise and when the hawkish tone returns, we may see some shorts getting squeezed.

At the moment we are long GBP/USD. For more details on this trade, please join our Forex member services.