Forex Technical Update July 6, 2010  GBP/USD: Pullback Suggests Possible Double Top   

  • 4H and 1H: The GBP/USD pair is at a resistance area of 1.52, and has so far paused the current rally that started in mid-May. The latest video update noted a 1H chart head and shoulder pattern.
  • After the break below, there is a pullback, and I was stalking this pullback. It is stronger than I like. It suggests the market is not ready to reverse to the bearish mode. We may be in some choppy sideways action first.
  • So far, the pullback is at 78.6% retracement level, right at 1.52.
  • The market may be setting up a double top. This would be confirmed if price can go below 1.5075.
  • A break below suggests it may slide towards 1.47, the previous resistance. But first it will have to start by making lower peaks in the 1H chart, as well as lower lows. Therefore, wait until a break below 1.5075 for a strong bearish signal. Then a pullback may help confirm, or suggest as it is now, a further period of consolidation.

  Fan Yang Currency Analyst Commodity Trading Advisor

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