GBP/USD: Bullish Pennant (September 19, 2013)

GBP/USD staged a strong rally yesterday, thanks to the upbeat BOE minutes and the Fed’s decision against tapering. This was enough to push GBP/USD past the upward channels on the 1-hour and 4-hour time frames.

Right now, a bullish pennant consolidation pattern is forming. Although the path of least resistance is to the upside, there’s still a couple of event risks for the UK today.

The UK will release its retail sales and CBI industrial orders expectations. A small rebound is expected but we might be in for strong figures, given how the UK economy has been performing recently.

A long order above the 1.6150 area is a good level to enter and a tight stop below the pennant would yield a good reward-to-risk if you’re aiming for the 1.6300 resistance.

By Kate Curtis from Trader’s Way