GBPUSD Weekly Summary: Bullish Channel Vs Hanging Man.

 @ibtimes
on September 11 2009 1:28 PM

The GBPUSD had a significant bullish momentum this week, topped at 1.6740 and closed at 1.6655. On daily chart below, we can see that the 1.6740 area could be a very important resistance level as we had 2 other daily highs around that area, July 31 (1.6732) and June 30 high (1.6743) connected by the red horizontal line. A Clear break above 1.6740 could trigger further bullish momentum targeting 1.7042 while a failure to move above that area should trigger some downside corrections.

On h4 chart below we have a valid bullish channel indicating a bullish view but also a hanging man candlestick pattern, which is a bearish reversal pattern that could be a potential warning of downside correction. I still prefer a bullish scenario, targeting 1.7042 especially if we have a break above 1.6740 area, but if the hanging man give us a valid downside pullback signal, we might see the pair testing 1.6593 and 1.6500 ( 23.6% and 38.2% Fibo retracement of 1.6113 – 1.6740) support areas which also challenging the bullish channel. Only a violation to the bullish channel would be a threat to the bullish scenario.

Have a great weekend and see you guys next week!

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