Forex Technical Update
GBP/USD's reaction to Bernanke's speech trumped the reaction to the poor GDP. The GDP data pushed the GBP/USD off its 1.6165 resistance, but Bernanke's speech (which gave no new information) pushed the GBP/USD above the resistance until stalling in the 4/26 US session around 1.62, and the rising wedge resistance.
There seems to be a major development in the GBP/USD daily chart. Price has broken above the 1.6164 high from 10/31/2012. The daily RSI is reaching close to 70, above which the reading reflects bullish momentum albeit in the very short-term - overbought condition. Even though we might be seeing some resistance soon, the market is generally bullish in the daily chart.
The market does not seem to be slowing yet, but there is another important resistance coming up soon seen in the weekly chart.
As the market approaches 1.63, we have a projected declining trendline that connects the 1.6745 2011-high to the August 2011 high of 1.6616. These two pivots are also targets for the scenario in which GBP/USD breaks above the 1.63 and declining trendline.
In the weekly chart, also note that the 1.63 pivot corresponds to the resistance pivot from the Oct. 2010 high. Since the market has been bullish in the medium term, the short to medium term bearish outlook for a resistance bounce from 1.63 should be limited to the 1.60 handle.
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.