Forex Technical Update

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GBP/USD 4HChart 11/1/2012 8:00AM EDT

GBP/USD 11/1/2012 4H chart

Breakout: The latest GBP/USD updates have been stalking the pair as it consolidates, and then attempts to breakout. During the 11/1 Asian and European session, cable was able to push above 1.6143 resistance pivot as well as a consolidation resistance trendline. The RSI also held above 40 and is now kissing 70 after it tagged at the end of last week. This shows development of bullish momentum as GBP/USD breaks above consolidation.

There is a bit of overbought condition in the near-term. If the market can hold above 1.61, the bullish outlook is still in place. Below 1.6090, the break might be a false break, and consolidation is likely to continue. This means more sideways, slightly bearish action for another couple of weeks, possibly between 1.59 and 1.6180.

Targets: A break above 1.6180 extends the bullish outlook. There is a swing projection to 1.6235. A slightly more aggressive target is the 1.63-1.6308 high from September. Above that, we open up the 2012 highs of 1.6621 up to 1.6748.

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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