Forex Technical Update
GBP/USD 4HChart 5/17/2012 11:04 AM EDT
Since the dovish BoE inflation report and Mervyn King press conference, the sterling has been weak, and the GBP/USD has been sliding sharply. After a brief pause at 1.59, the market fell sharply to 1.58 and is now testing an area of support cluster from 1.5770 to the 1.58 handle.
Looking at the daily chart below, the 1.5770 level is 50% retracement of the 2012 rally from 1.5237 to 1.6305. There are also a bunch of support pivots around 1.5780 that was holding in March through mid-April. This use to be a key resistance pivot back in Nov through Dec. 2011.
Can we get a bounce here? Technically we might be ready, but there is missing a fundamental trigger, that can bring about some risk appetite and suppress USD's onslaught.
If we get a bounce, 1.6050 should be the maximum target, with 1.5980-1.60 area also a possible resistance with selling interest.
GBP/USD Daily Chart 5/17/2012 11:10 AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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