Forex Technical Update
The 1H GBP/USD chart shows a market that is breaking out below a flag pattern. The market has been bearish in the short-term trading under the 200 hour simple moving average, with the RSI dipping below 30 and now failing to sustain a break above 60. A return below 40 suggests a return of the bearish momentum. Respect of a declining resistance also shows lack of bullish intent to extend the flag pattern. Price action is very heavy relative to the small candles in the flag. The 1.5420 level is a pivot that opens up to 1.5375 low if broken. The lower support levels at 1.5360 and the 1.5310-15 area. A break below 1.53 opens up further bearish scenarios as that would break below a key support.
The GBP/JPY is also in a bearish breakout of a consolidation pattern, which was more of a wedge than a flag. It also held price under a declining trendline, and the 1H RSI reading under 60, pushing back below 40. Price action is heavy relative to the small candles that went into the development of the wedge. The 118.50 and 118.25 pivots are next. A break opens up support in the 116.90-117.00 area. As noted in the previous post, GBP/JPY also has a swing projection in the higher degree (daily chart) to 114.70.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources