The GBP/USD broke below a rising trendline seen in the 4H chart. This came after a rally from near 1.58 up to 1.63. 1.63 was a pivot coincident with a declining trendline. From the 1.63 handle, the market fell through the the rising trendline, but initially traded sideways in the breakout. The 5/2 Asian-European session confirmed the break by pushing below 1.62. Now as the 5/2 US session starts, the market is at a pivot zone between 1.6150 and 1.6170, which provided resistance during 4/23-4/25 and support after that through 4/27.
If the market breaks below the 1.6150 level, we open up the next pivot around 1.6070 (50% retracement of the 1.5826-1.6305 swing). Ahead of Friday's Non-Farm Payroll, it will be a challenge to break through these levels as the market gears up for this important risk event that can shake up the USD-crosses.
The ability to hold below 1.62 in the 5/2 US session can be a good sign for the bearish outlook. Otherwise, if the market can push above 1.6250, we are likely in a bullish continuation, and the 1.6280 resistance will be vulnerable after bulls take back control.
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.