Forex Technical Update
Since breaking below the 1.5650 level, the GBP/USD has rebounded and showed respect to 1.5650 as support (seen in the 4H chart). Now there appears to be strength in the market pushing against a declining trendline. A break above 1.5750 is a first bullish signal. However the outlook is at the moment limited to 1.58, central pivot of a range as well as a neckline to a head and shoulder. In the 4H chart, you also see 1.58 just above some moving averages (200, 100, 55), which also add to the resistance factor here.
A break above 1.58 shelves the bearish outlook, returning it to sideways with bullish bias. If the RSI in the 4H chart also breaks above 60, it reflects that the bearish momentum is lost and the market remains sideways in this time-frame.
The daily chart shows the market at the crossroad. Now only a push back below 1.56 should open up the bearish outlook toward 1.5415 and 1.5320. The daily RSI should also break below 40. Otherwise, the recent bear run could have been part of an expanded flat correction. to be followed by another bull run like the one that we saw in Jan of 2012.
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Fan Yang CMT is a forex trader, analyst, educator nd main contributor for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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