Forex Technical Update

Previous: GBP/USD Might not See Support Until 1.5740-1.5750 (9/6)



The 4H GBP/USD chart shows a bearish channel and as anticipated in the previous post, the currency pair found some support near 1.5740 as the currency markets consolidated last week. The common support was more like 1.5725. This week, the market opened with risk aversion, and the Sterling-US dollar fell below 1.57, accelerating in the beginning of the US session. The respect of 1.5870 last week also shows the market keeping to the bearish channel seen in the 4H GBP/USD chart. Note the failure of the RSI to break above 50, much less 60, and now returning to 30. The high in the RSI last week is higher than the previous week's, but the corresponding price high was lower. This suggests that the bearish mode remains, and a strengthens the case for a swing projection towards 1.5540. Below this target, the market opens up the Dec 2010 lows near 1.5350.

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Fan Yang CMT
Chief Technical Strategist