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Home » Featured » GBP/USD at 50% Retracement with Semblance of a Double Top

GBP/USD at 50% Retracement with Semblance of a Double Top

Forex Technical Update

GBP/USD Daily chart 1/22/2013 2:30PM EST

(click image to see full size)

50% retracement: GBP/USD continued to slide after breaking below a rising trendline as noted in the previous GBP/USD update. Since the break last Friday, cable has edged lower until it hit 50% retracement of the 1.5267-1.6380 bull run from June 1 to  Jan. 2. Not only is this 50% of the half-year run, but also somewhat in the middle of a range that cable has been trapped in since  the middle of 2009. (Check your weekly charts to confirm this general statement of non-direction in the long-term).

Double Top? There is a semblance of a double top being formed here. However, I don’t really like to call this a topping formation because it took the entire upper half of a range since 2011. Breaking below 1.58 could be a sign of some short-term bearish outlook, but since we are in an overall range-bound market, the further away from this “center” the more likely it will come back towards it. Therefore, This is a case, where if you find a bullish divergence in the daily RSI, it could be worth considering bullish outlooks toward the 1.58 area.

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.

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