GBPUSD Analysis – iH&S waiting for an activation

Brexit saga continues. GBP remains very volatile, moving in both directions. In this piece, we will analyze the GBPUSD. For the last time, we wrote about this instrument on the 7th of December. Back in that day, we said that not much should happen before the vote:

“The latest technical pattern is the inverse head and shoulders pattern (yellow), which may promote an upswing. On the other hand, I don’t think that traders will like to perform any bigger action before the voting that will take place next week. „

First of all, there was no vote. Actually no vote about the deal. There was other one though – the vote important for Theresa May. She managed to win that battle , which brought some relief for the pound. From the technical point of view, that positive sentiment is shaped like an inverse head and shoulders pattern. Currently the price is testing the super important horizontal resistance (purple), which interestingly, is in the same place as the dynamic neckline of the iH&S formation (green). Comeback above those two lines would be a legitimate mid-term buy signal. Chances for that are substantial but for the proper signal you still need to wait for the daily candle to close.