GBP/USD Breaks Declining Trendline; Stalking Throwback

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Looking at the 1H chart, we see that the throwback will be testing the broken resistance as it goes to the 50% retraecment level at about 1.5630. For the market to confirm the breakout, the market should hold above 1.5607/1.56(61.8%retracement). Meanwhile the RSI should hold above 40 to reflect maintenance of bullish momentum. If the market indeed holds above 1.56 and pushes back above 1.57, we are looking at 1.5770.

Otherwise, if the market falls below 1.56, and below the rising channel support, we have a more significant correction to the channel, not just the latest breakout swing. In this scenario, we look at the 4H chart to stalk this extended retracement toward first the 38.2% level near 1.5540. Then the 50% retracement level near 1.5483. For purpose of calculating reward to risk, we should probably look at 1.55 as a target if correction extends below 1.56.

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Fan Yang CMT is the Chief Technical Strategist of IBTRADE and FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes and IBTRADE will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.