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An ambiguous situation on the Pound

04 May 2016, EUR/USD

Daily chart: quite a strong and significant correction with the bearish momentutom, but the situation is twofold, because Bollinger envelope either doe not support a deeper rollback either are late in analysis of the situation. However, the pair is deeply in the middle of the top envelope, making touch of the middle band (1.4361, see the blue arrow) more likely.

Н4: On the local level, support from the horizontal bottom Bollinger band (1.4523) looks strong. Resistance is at 1.4615 (middle Bollinger band).

Н1: The pair is squeezed within the range of Bollinger envelopes (1.4475-1.4658). We can make both purchases from the top and sales from the bottom.

Expectations: So movement down to 1.4475 and surge to 1.4658 are equiprobable. In any case, we should act on specific situation and either buy from 1.4475 or sell from 1.4658

Trading solutions: act based on one of the scenarios.

Aleksey Panasenko
FreshForex Analyst
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