The binary GBP/USD rate is gaining ground based on the expectations that the Bank of England will not decrease the interest rates on the sterling. However, it seems like the enthusiasm of the binary currency market will be short-lived and a downside move will be triggered. When I was writing this article the binary pair has retreated from a six months high, forming a spinning top for now. The binary trader should be ready to buy put options with a strike price of 1.5910.
The technical outlook for the binary pair looks bearish. There are several technical factors that are in favor of this opinion. Firstly, the ascending triangle is on the verge to be broken. It takes more than 2 months for the pattern to develop. It is a great deal of time for the price to be closed in such a tight range. Moreover, the pair is known as a fast mover which needs space to achieve its goals. Secondly, the slope of the triangle is in the same direction as the impulse wave is. This is considered to be a bearish sign because it does not represent a corrective wave, but rather a continuation of the first wave. The move becomes exhausted and the subsequent retracement could be violent.
The boundaries of the pattern are well-defined. The support line is drawn from 1.5600 to 1.5800. The resistance is drawn from 1.5930 to 1.6080. The binary pair tested 1.6080 in the morning, but quickly retreated.
The whole wave of 1.5250-1.6050 represents 88.6% of retracement of the previous downside wave from 1.6150 to 1.5250. It is a typical Fibonacci`s level to expect a correction in the move. The US Dollar index stays steadily above its 50MA, which is a bullish signal for the greenback.
