Watch This Market

I've been following the British Pound very closely over the past few weeks and I think we are about to see a move take place. Above is a daily chart of the ETF for the British Pound (FXB) and in the lower pane is the ADX indicator. Notice how low the ADX is right now, it's below 15. If you look at the price action you will notice a solid line of resistance taking place at around the 166 level. If you look even closer at the arrows that I placed on the chart, you will notice that the lows are getting higher which tells me that buyers are entering the market. This is is similar to an ascending triangle chart pattern.

I think if the pound can close above the 166 level, that may be the beginning of an up move which might be rather large due to the 8 year cycle that dominates this currency's trends. Take a look at a long term monthly chart of the British Pound (not shown) going back 30 years and you will notice a very dominant 8 year cycle of lows which has been very accurate. In my opinion I believe that an 8 year cyclical low has been made. Only time will tell if I am right but for now I'm going to just trade what I see and let the market dictate if I enter long or not.