BOE: Official Bank Rate
Today we examine the price activity of the GBP/USD currency pair on the H4 chart. The price approached the daily resistance line and entered the consolidation phase. In this case the most unambiguous signals are coming from the RSI-Bars oscillator. Note that the current bar has already crossed the last low (see red ellipse on the figure). It certainly tells us about the strengthening of the bearish sentiment ahead of the Interest Rate Statement released today by the Bank of England (13:00 CET).
Note that the daily resistance at 1.55533 was confirmed for three times and, thus, can be a reliable level of risk mitigation when going short. This level importance is also proved by the upper Donchian Channel boundary. We expect that the closest to price resistance of the RSI-Bars will serve for support level. It means that conservative traders should wait for the breakout of this level to confirm the bearish sentiment. A pending sell order may be placed below 1.53543. The breakout of this mark is likely to lead to the cross-over of the assumed RSI support. Stop loss is to be moved every day to the break-even point, placing it above the last high (trend-following strategy). Thus, we are changing the probable profit/loss ratio to the breakeven point.
|Sell stop||below 1.53543|
|Stop loss||above 1.55533|