Forex Technical Update

Previous: GBP/USD Testing Multi-Year Support Around 1.53...(6/3)

GBP/USD Chart 1H 6/5/2012 11:23AM EDT

GBP/USD

The GBP/USD continues to trade within the range immediately established after the NFP release on 6/1. The range is between the 1.5280 support and 1.5440 resistance.  Since then, the market traded in a triangle, and broke below that in the 6/5 Asian-European session.

As we get into the 6/5 US session, the market has pulled back from 1.5325 and is now near the 1.54 level, which represents the apex of the triangle. Holding below 1.54 can give a bearish tilt, especially with the 1H RSI reading staying below 60.

Still, the bearish outlook will be limited to 1.5280 for now. The GBP/USD is trading at a a multi-year support around 1.53, so the market might need some fundamental pivot before being able to push below 1.5280.

A Push above 1.54 opens up 1.5440, still within consolidation mode. Above 1.5450 with the 1H RSI above 60 and preferably tagging 70, the market is likely at least in a short-term recovery from May's decline in the GBP/USD. The bullish outlook should be limited to 1.56 handle.

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Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of rex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis