orex Technical Update
GBP/USD 4H Chart 7:35AM 10/17/2012
Consolidation breakout: The GBP/USD continued to rally since the rounded double bottom spotted last Friday (10/12). The rally has pushed the 4H RSI above 60, showing lost of bearish momentum, and has broken above a falling trendline that held the consolidation since the high just above 1.63. As we gear up for the 10/17 US trading session, price is at 1.6180, the 61.8% retracement of the Sept-Oct bear run. Clearing this retracement level will give additional reason for more short-term bullish outlook.
Momentum: The daily chart shows that the bullish momentum in this time-frame is intact as the RSI reading held above 40 after tagging 70. If it can push above 60, the Cable is likely in bullish continuation. Before that, we have 1.63 in focus. Then it is unclear. If you believe in more consolidation 1.63 should hold as resistance, with the daily RSI held under 60, given some elbow space.
1.63: This is a major resistance and WAS the 2012 high before it was cracked in September. However, clearing above 1.63 introduces another bullish outlook with focus toward the 2011 resistance pivots at around 1.6620 and 1.6750.
GBP/USD Daily Chart 7:40AM 10/17/2012
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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