Forex Technical Update
GBP/USD is sliding along with other USD-crosses, and risk-off gives the US Dollar a boost due to its safe haven status. It has slid sharply and cracked the 1.5870 low. However the break has not been very convincing, and while it might continue to be pressured due to risk-off dynamics, the sterling by itself is more resilient than the other majors such as AUD, NZD and CAD and even EUR.
The 4H chart shows the GBP/USD testing the 200 period simple moving average. The RSI is still above 30, so there is no bearish momentum, although cracking 40 reflects loss of bullish momentum established in October. Topping has yet to be confirmed but doing so will align the 4H chart to the bearish daily chart. We can confirm topping after a subsequent pullback that fails to break back above 1.59, and the bearish outlook can be the 61.8% retracement level at 1.5612, 78.6% retracement level at 1.5462, or even the 1.5270 2011 low.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources