Sterling almost regained all the pips lost after the BOE announced a rate cut and the intention for more rate cuts this year. The pair was trading in a 1 hour channel which was broken today after reaching the top of the bigger falling channel on the 4h chart .
So we have two channels in play now , uprising one which was rejected by the resistance line at 1.3270$ and went to find support at the 200 MA on 30 min chart and the base of the channel at 1.3170$ .
The pair bounced 20 pips from the support , however I expect a break of the uprising channel and break of the support at 1.3170$ area.
While the markets are waiting for any clues from janet yellen tomorrow at the jackson hole symposium , the pair will react violently to any hints about rate hike from the federal reserve .
Personally , I believe we might see a rate hike in september .
Anyway , we have two scenarios and possible trades here :
First one : long the pair on the close above resistance trend line possibly at 1.3250$ ...and if this happens I recommend holding that trade till 1.3650$ , that would be safe 400 pips
Second one : short the pair on close below support trend line possibly at 1.3180$ ...and if this happens I recommend taking profits on two halves , 50% at 1.3030$ and 50% at 1.2780$
Follow me on twitter for updates on this trade : @boriology
