Forex Technical Update

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GBP/USD Daily Chart 10/29/2012 9:35AM EDT

GBP/USD 10/29/2012 daily chart

Held at resistance: The GBP/USD stopped at 1.6143 on Friday (10/26), failing to clear above the consolidation pattern that has been developing since the 1.6308 high. The daily RSI remains between 40 and 60, a reflection of consolidation momentum. Price action suggests we still have some bearish bias in this consolidation against the rally from 1.6267 June 1 low to 1.6308 Sept 21 high.

Support: The very short-term support pivots to watch out for in the current bearish scenario (within the consolidation context), are 1.5975 and then 1.5913. If we clear 1.59, the 200-day SMA is a key factor to monitor, but more importantly will be the 50% retracement in the 1.5780-1.5790 area, which also includes a resistance/support pivot, and possibly near the rising trendline.

As noted, this bearish outlook is in the context of a consolidation. So there is another chance for the market to bounce off support, especially when the daily RSI is around 40 again.

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.


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