Joins the dollar selling party
The GBPUSD has just broken above the topside trend line at 1.5603. The pair has been more up and down in trading today. Employment showed that average weekly earnings were less than expectations. The quick fall was quickly retraced, however.
Now with the break higher, it should solicit more buying with the next targets at 1.5636, 1.5644 and the highs for the month at 1.5677 and July at 1.5689 (see chart below).
The pair has been confined in a narrow trading range over the last month. The range has a high of 1.5689 and a low of 1.5424. The 265 pips for a month's time (since July 13) when compared to calendar months, is the lowest going back to 2002 (in other words, there have been zero calendar months < 265 pips). The range for August is 254 pips so far. What does that mean? Non trending transitions to trending. So be on the lookout. Traders will be looking for the momentum from the break above the trend line to continue if the buyers are to keep control and get a trend going with an extreme taken out at some point. The break above the trend line will be eyed as a clue of "the markets" intent if the break level can hold.
