Forex Technical Update
The 4H GBP/USD chart shows a market that is trading in a slightly bearish channel, within a consolidation range between 1.5421 and 1.5778. We are actually just hovering above 61.8% retracement at 1.5558. As the market consolidates, we see a bit of a bearish bias. The RSI in the 4H chart did not tag 70, but did tag 30 previously and the market is trading under the 4H simple moving average. A retest of 1.5421 looks to be developing esepcially with the bearish candles now dominating since the Nov 30 pop. Now a break in the RSI reading below 40 should help confirm the bearish bias in the context of consolidation.
The 1H chart adds to the case for bearish bias. The market is now trading below the 200 hour SMA after a test of it as resistance. The RSI has tagged 30, and is staying below 60. Here too, if the RSI reading falls back below 40, we have evidence of the bearish intent in the short-term, with a target toward 1.5421.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources