GBPUSD finds resistance at 80 day VTL

Valid Trend Line forms Resistance

As expected and anticipated in the previous post on the pound vs the dollar, price found resistance exactly at the level of the 80 day downward VTL. If you are not sure what a VTL is, please take a look at the hurst cycle learning material. Unlike arbitrary ‘trend lines’ so beloved of traditional technical analysis, which are often useless (or indeed unknown VTLs!), valid trend lines are based on cyclic principles.

My target for this first 20 day FLD interaction was 15345. The target has been overshot at this point as expected as the underlying trend is up, currently at 15352, where it reversed. I now expect price to form the first 20 day trough of this 80 day cycle. The 20 day cycle is averaging around 15 days at the moment so Monday should be a good chance to go long for the next move up.

Here is the chart setting out the current position:

GBPUSD_£__daily_07_02_2015I expect price to move above the 80 day FLD, setting up the projection for the current 80 day cycle and perhaps the 20 week top. Remember, this pair is currently long term bearish if the 18 month was straddled in September last year.


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