Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- The GBP/USD looks the weakest of the 3. The USD is strong to end the week pushing the cable lower in a second swing down.
- The 1H chart shows the decline starting, and the RSI tagging 30, a sign of bearish momentum.
- The daily chart shows the market after a 5-wave rally, suggesting a decline towards somewhere between 1.57 and 1.58 (1.5750?).
- The current decline looks to find support near 1.60 (61.8% retracement). A break below that then suggests the targets near 1.5750.
- However, if we are not done with the terminal wave, we can still have a rally from above 1.60 towards 1.63 before the correction back towards 1.5750.
- The GBP/JPY pair is refusing to top off in what appears to be a head and shoulder. However, the neckline is not broken, and the market rejected a decline below the 131.00 clip.
- It was a sharp rejection seen in the 1H chart, and pushes the RSI back above 40, so the bullish mode remains.
- To me, the GBP/JPY is making a lot of noise in this messy consolidation, with no clear signs of direction. The bullish outlook requires first a break above 132.00, and then targets the highs in November near 134.00.
- However a close in the 1H chart below 131.00, should bring the market lower towards 129.50.
- The daily chart shows that the bearish outlook is limited, until the 129.50 area is cleared. Even then we have the 128.00 support at 61.8% before we can test the 126.50, and 125.55 lows from October and December.
- The GBP/CHF pair has retraced January's decline almost 100% near 1.54. The RSI in the 1H chart shows the market in a healthy bullish attempt in the very short-term. The daily RSI shows the momentum h as flattened after being bearish, but has not turned bullish in the intermediate to long term.
- The 1H chart shows a few support levels that need to broken before considering the bearish continuation.
- First 1.5210 and the rising support in the 4H chart need to be broken. Then 1.5110 need also to be cleared as well as the rising support seen in the daily chart.
- The upside opens up after a break above 1.5420, after which, we can look for the market will have 1.59 in sight, where the 200SMA resides at the moment in the daily chart.
Will the sterling continue to strengthen in February? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist