Forex Technical Update

Previous: GBP/USD at a Key Juncture for Short-term Direction (9/27)

GBP/USD 1H Chart 9/28/ 2012 6:55AM EDT

GBP/USD 9/28/2012 1H chart

Bullish breakout: The GBP/USD broke above some resistance factors during the 9/27 session, the main one being the declining trendline going back to the September and 2012-high just above 1.63. However, the first resistance pivot seen at 1.6265 rejected the breakout rally and a sharp throwback is developing.

Near-term trendline: Price action is breaking below the near-term rising trendline from the 1.6137 low, and cracking the 1.62 handle. The 1H RSI is falling back to 40, a break below which reflects loss of the very short-term bullish momentum just established in the past couple of sessions. The breakout does not seem to be able to sustain.

The 1.6165 and 1.6137 support pivots are now in focus.

Rising trendline: The bearish outlook however should be limited for now to a rising trendline we see in the 4H chart, which has  been support, holding August’s bullish price action. That would probably be closer to 1.61 when price gets there assuming it does not just plunge straight down in which case the 1.6065 pivot and trendline are coincident.

Swing projection: The 4H chart shows a swing projection for another corrective decline with equality to the “abc” correction already completed.

GBP/USD 4HChart 9/28 /2012 7:04AM EDT

GBP/USD 9/28/2012 4H chart

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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