Forex Technical Update
After breaking a channel to the upside, the GBP/USD was in a throwback that respected the pivot near 1.5660 pivot. This was followed by a push above Dec high at 1.5753 but just below the November 30 high which coincides with 50% retracement (of the 1.6128-1.5422 swing seen clearer in the 4H chart) at 1.5755. From this resistance zone, the market fell sharply and is back to test the 1.5660 pivot area. The 200-hour simple moving average is near, just above 1.5630. If this is broken, and the 1H RSI reading pushes below 40, we invalidate the upside break of the channel. Note that the 61.8% retraement of the recent upswing is at 1.5640, and a break below this is not good for the bullish outlook neither.
The 4H chart shows that above the 50% retracement and Nov 30 high (1.5775). The next resistance area is the 61.8% fibonacci retracement and pivot between 1.5858-1.5870. Above that, we have a swing projection that points to 1.5910. Considering the fact that the market has not established bullish momentum in the 4H chart, this should be the maximum target for a bullish outlook that bounces off the pivot area around 1.5660.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources