- 4H: The near-term dollar weakness to start the week is also seen in the GBP/USD pair, which is rallying with strength, unlike the EUR/USD which is climbing slowly. Therefore, judging purely from price action, the EUR/USD looks more ready to continue its decline.
- The GBP/USD is bullish in the near-term after bottoming at the 1.6100 (61.8% retracement) level, but may still be bearish in the short-intermediate term with a target to 1.57/58. (Refer to Daily Technical Update 1.22.2010 GBP/USD)
- If the GBP/USD tops off about 1.6240 (78.6% retracement in 1H, and just above 38.2% in 4H), we may have a continuation decline. It is approaching that level as I write.
- 1H: In assessing the GBP/USD price action, it appears the target of 1.57/58 will take longer than EUR/USD’s target at 1.38. Therefore, a more conservative target for GBP/USD is the 1.60 level.
- With this target, the 3ATR stop placement gives us a 1.33:1 (200:150 pips) reward to risk ratio. A more liberal target at 1.58 is approximately 2.6:1 (400:150 pips).
Fan Yang
Currency Analyst
Commodity Trading Advisor
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. CMS 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 analyses.
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