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Northern preparation

31 May 2016, GBP/USD

Daily chart: strong resistance around the upper Bollinger band (1.4735) still remains there. ADX is not ready show active buyers yet.

Н4: and here, in its turn, we notice a bullish charge from ADX/RSI, which, with a high probability, can be activated today. Resistance area 1.4723-1.4735 is taking the blow, and another slight correction still can take place. But the overall outlook is Northern.

Н1: the potential area of ​​demand in pound is the middle Bollinger band (1.4637). At the same time, it is clear that the pair is heavily overbought and ADX needs to reboot down. There is not much space for that, so it can lead to even a deeper drop (eg, to 1.4590)

Expectations: The main scenario - decline to 1.4637 and then surge to 1.4735

The alternative scenario - decline to 1.4590 and then an abrupt upward reversal

Trading solutions: So, we shall be looking for signals and upward entry points to 1.4637 and 1.4590 zones.

Aleksey Panasenko
Analyst of «FreshForex» company
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