The GBP/USD currency pair has formed a classic flag pattern, a well-known trade set-up that, if confirmed, would project a sizable move higher for the pair.
The British pound/US dollar currency pair, AKA “cable,” has been in a consolidation pattern since late January, trading in a broadening range between 1.5937 and 1.6429.
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Recent price action within this range has formed a pattern known as a flag, consisting of a short-term countertrend channel after a significant directional move.
On the chart below, the countertrend channel is highlighted by the orange arrows, while the “flagpole” is highlighted by the green arrow.
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This formation would be confirmed by a close above the downtrend channel at 1.6336, with additional confirmation given by a close above horizontal resistance at 1.6429.
The implication of this formation is a move to 1.6828.
By Clive Lambert of FuturesTechs.co.uk
