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Pound approaching chart support

The Brexit vote has been the key driver of the Pound’s fortunes in recent months. Ever changing poll results seem to have driven a lot of twists and turns in the currency.

Interestingly though, if you stand back and take a bird’s eye view of the daily chart, there’s been a lot of symmetry in how the Pound has behaved.

Since its major low in February, the Pound has formed an upward sloping trend channel. The last major correction formed a neat, harmonic AB=CD pattern at around 1.40.

There’s a decent chance that this pattern could be repeated in the next week or so.  A low at 1.43 would be another AB=CD formation and a rejection of the channel support. This could set up for a rally, perhaps for another test of channel resistance.

One approach here is to to buy with a close stop if GBPUSD does hit this 1.43 support area and then shows signs of bouncing out of it.

If the Pound just falls straight through this support zone there is no trade set up.

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