Forex Technical Update

Previous: GBP/USD Testing Short-term Trendline Near 1.54 (6/8)

GBP/USD Chart 1H 6/1/2012 11:26AM EDT

gbpusd06112012

The GBP/USD like many USD-crosses failed to follow through with the initial risk-on pop to start the week, which followed the Spain bailout headline. The 1H chart shows a failure to reach last week's high near 1.56 before falling back into the gap that is shown in many retail broker platforms.

It was consolidating in the 6/11 Asian-European session above 1.5525, but broke below that during the US session, now testing the 1.55 handle.

An even more significant support lies around the the 1.5440 area. This is a pivot area as well as near the 200-hour SMA (which is closer to 1.5450). Also this is likely where a rising trendline will be if the market does fall further in the US session.

We might be able to expect some short-term attempt to support the GBP/USD in this area, for another attempt toward 1.56, especially if the RSI in the 1H chart stays above 40 and push back above 60.

However, if this breaks, we open up the 1.54 psychological pivot and then the 1.5285-1.53 May/June lows.

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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.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis