The GBPUSD has been trading within a range lately on the daily chart. So if you’re a position trader, you might be getting a little impatient and itching to trade.
Daily Chart of GBPUSD 18th October, 2007

Where will the GBPUSD go?

The trend prior to the trading range has been up, so there is a possibility that the GBPUSD may breakout to the upside. However, things aren’t so clear when you expand the chart out to encompass a longer time frame.

Bigger View of the GBPUSD Daily Chart

Although the trend has been up, I’m more inclined towards the idea that the GBPUSD will be showing short bursts of trend (either up or down) before sitting in another trading range again. It’ll be some time before we see those strong trends like those from the middle of May 2007 to end of July 2007.

In fact, since August 2007 the GBPUSD looks like it’s “laboring” to find traction in an uptrend. Trends have been in bursts of 2 - 3 days, then entering really choppy waters with erratic movements up and down.

With this kind of recent action, I would think it likely that short term trading would be more suitable in terms of trading the GBPUSD that taking on End of Day trading positions. As it is, it’s equally likely that the GBPUSD might break downwards as it might upwards.

I know, it sounds like a “cop out” answer but it’s the truth. You can’t tell what the market is going to do, until it does it. And that’s a lesson in itself!