GBP/USD Daily Chart 7:45AM 10/24/2012
Support: The GBP/USD has been falling choppily from 1.63, though picking up more downside the last few sessions. During the 10/23 and first half of 10/24 session, the pair tested the 38.2% retracement at 1.5910. The 1.59-1.5910 included a previous pivot and was a psychological support. The RSI held above 40, which is a sign of maintenance of the bullish momentum established by the rally since June.
The market still retains a bullish bias. In the short-term it is not clear however if there is further downside. A break below 1.59 should open up the next key support area in the 1.5780-1.58 area, which includes 50% retracement and a key support/resistance pivot. The rising trendline from June’s low of 1.5267 is also a key support.
If the market can not push back above the recent 1.6065 support/resistance pivot, then there is likely still further downside. But if it clears this and pushes above the short-term falling trendline from 1.63 area, then a bullish continuation is likely taking place, with focus first on the high near 1.63, but with potential for further upside.
Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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