Forex Technical Update
The 1H GBP/USD Chart shows a bullish market. The RSI has tagged 70, failed to sustain a break below 40, and returned above 70. As we get into the Monday US session, we see another throwback this time from the 1.60 psychological resistance. The RSI reading is still above 40, and price action only at 23.6% retracement from the 1.5631 low to basically a 1.60 high. Retracement to 38.2% would be 1.5858. If we measure the fibonacci study from the 1.5680 low instead, the 50% retracement would be 1.5840. This 1.5840-1.5860 area should provide support if the market is to confirm the bullish breakout of last week's sideways consolidation.
If however the market falls below 1.5770 and the 61.8% retracement level seen in the 1H chart, we could be witnessing a fake breakout to the upside, which is actually a bearish sign for a reversal or at least to stay in a range-bound market, where support is near 1.57.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.