GBP/USD set up for next big move



GBP/USD June 2012

It's been a long drawn out process but Sterling looks to be close to breaking out of a large symmetrical triangle which has its origins back in January 2009. GBP just hung on to the lower boundary a couple of weeks ago, slightly breaching it during the week but recovering to close above the line.

Which way will it break? Best to just wait and see. I'm favouring the downside. The selling of the past couple of months was heavy and I don't think that momentum has ended yet. Another sell-off would most likely see the lower triangle boundary tested and breached.

The move either side of this triangle will be one worth being on. On the downside I'd expect the 1.3500 level to be revisited and I can make a case for 1.2200 should that support level fail. An upside break would imply a retest of 2008 resistance/former support levels in the 1998-2000 area.