Forex Technical Update
GBP/USD 1H Chart 8/22/2012 9:15AM EDT
The GBP/USD has cracked a rising triangle pattern seen in the daily chart below. In the 1H chart above, we see that the pair losing steam as it shows a bearish divergence with the RSI and with the upper bollinger band. (The bollinger bands here are 3 standard deviations from the 200-SMA). A break below 1.5765 would likely show some near-term topping for a bearishcorrection.
If the throwback holds above the 1.5745-50 area, the bullish breakout is still developing, especially if the 1H RSI also holds above 60. Below that, it is not clear, though the bearish outlook only opens up with a break below the rising trendline, which coincides with the 200-hour SMA at the moment.
As noted in the previous update, the bullish outlook has 1.59 then 1.5934 as very short-term targets and levels to monitor forresistance. Further extension of the rally opens up the 1.60 handle and the 1.63 2012 high. A break below 1.57 breaks a rising channel, and opens up a slightly less inclined rising trendline near 1.56 at the moment.
The daily chart below the 4H chart shows the market at the brink of clearing above an ascending triangle. The daily RSI is at 60, a break above which kills the previous bearish momentum. Will the break follow through?
GBP/USD 4H Chart 8/22/2012 9:23AM EDT
GBP/USD Daily Chart 8/22/2012 9:23AM EDT
Fan Yang CMT is a trader, educator and a Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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