GBPUSD: Another Positive Continuation Signal Coming Soon?
The GBPUSD created a new closing high last week after the Relative Strength Index created a Positive Continuation Signal on Aug. 13. This new high did create some bearish divergence between the RSI and price. Because of this bearish divergence I am expecting at least a pull back here before another high happens later in the week.
I would like to see this pullback hold the 1.5436 lows and possibly the green trend line I have drawn. I would also like to see the Relative Strength Index create a new low down toward the red trend line I have drawn on the RSI. This would create another Positive Continuation Signal and increase the chances of another new high. I would be willing to bet that this new high would create another divergence giving us a nice short entry near the top.
The Elliott Wave Count I posted here on CurrencyWaves.com is another possibility this week and will also give us a great short play down the road.
GBPUSD 4 HR Relative Strength Index Chart
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