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Previous: GBP/USD Pushing Above 1.56 to Test Declining Trendline in Daily Chart (1/24)
GBP/USD
The GBP/USD failed to sustain a double top in the 1H chart when it respected the 1.5660 pivot last Friday (although initially cracking it). The failure to close below 1.5660 was followed by a failed attempt to sustain a break above the high at 1.5733. Instead as you look at the 4H chart, the market looks like it is again attempting to form a double top. But as usual, a failed double top can be just a flat correction, if the market fails to break the base. In the 4H chart, we see that the "base" is also the channel support, so a break will be significant.
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A break opens up a bearish correction attempt toward the 1.5545, 38.2% retracement level.
Failure to break below 1.5660/1.5650 keeps the bullish bias. In the 1H chart, we already see a strong bounce from this support cluster. If it can clear the moving averages and stay above them, we can be looking at a continuation at least toward the next resistance pivot near 1.5770.
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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.
