Forex Technical Update
Previous: GBP/USD At the Crossroad...(6/14)
GBP/USD Chart 4H 6/18/2012 7:03 AM EDT
The GBP/USD was not able to sustain a rally that accelerated Friday (6/15) and extended briefly to start the new trading week. As price approached 1.5750-1.5780 area, it tested a resistance pivot zone seen in late November through mid December 2011. Price was also testing the 200-day simple moving average.
So far, the overall market in the daily time-frame remains bearish. The RSI reading has tagged 30, and is still below 60, so there is no lost of bearish momentum in this chart. A break above 1.58 would be needed to break above a projected declining trendline going back to April 30 high near 1.6280. So from that perspective, we are still bearish.
However as the GBP/USD retreats, the 1.56 level may very well be grounds for support. Before acting as resistance, it was a support pivot established on March 12. It is also a psychological barrier that if broken, may open up the downside toward 1.5240. Before opening up this low, the 4H chart shows that there is a rising trendline that is near 1.55 as well. IF the 4H RSI pushes back below 40, and price below 1.55, we are even more likely opening up the 1.5240 low.
GBP/USD Chart 4H 6/18/2012 7:06 AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex 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.