Forex Technical Update
The GBP/USD in the 1H chart shows a market that is in 50% retracement of the swing from 1.6165 to 1.5892. This bearish swing broke below a rising trendline and established a double top as well as break below the 200 period simple moving average of the 1H chart. The pullback reflects reversion to the mean which is interpreted as 50% retracement or 200 SMA. The market may also tentative trading near the 1.60 psychological pivot. The RSI is at 60, a break above which suggests the lack of bearish momentum in the short-term, signaling deeper retracement toward at least 1.6060 and possibly even 1.61.
The 4H chart shows some bearish targets if the market is to respect the double top and broken trendline. The 1.59 is an important support. If this is broken, we open up 1.5850 in the near-term, then the 1.5690-1.5720 support cluster zone (200SMA, 50% retracement, previous support pivots).
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.