- Daily and 4H: The daily shows that the market is a correction rally attempt. The 134.50 area is 38.2% retracement and should provide some resistance.
- The 134.50 area was resistance in the 4H time-frame as well and the current rally is nearing that. The RSI in the 4H is bullish, but may be setting up a bearish divergence.
- The RSI in the daily may be setting up for a negative reversal.
- Look for topping at 134.50.
- However, if this area breaks, the next target is the 138/139 or 61.8% retracement area.
- Even then, the market would still be considered to be in a bearish mode, unless the rally is very aggressive, in which case we would have to consider a longer term bullish reversal.
- At the moment, still bearish, but a strong correction rally. A note is that the pound is clearly outperforming all the other major currencies today. You can see this in the GBP/USD, EUR/GBP, and here in the GBP/JPY.
Fan Yang Currency Analyst Commodity Trading Advisor