- 4H: Looking at the GBP/USD in the near-term, we see that the market is in a correction from the previous downswing. So far, some resistance at 50% and test of SMA 50, as well as stochastic crossover in the overbought zone.
- The market can still continue to rally to 61.8% reracement area, or even 153.50 to test the previous powerline. However, we can see that the market is already testing a minor powerline at 1.52. So let’s stalking this current near-term decline and see what scenarios might arise.
- 1H: Looking at the 1H chart, we see that indeed there is a retracement from correction swing of last Friday. Price action broke below a powerline near the 38.2% retracement, and suggests further decline. The stochastic is also declnining from the overbought area.
- An important area to watch is the channel support, confluent to the area between 61.8% and 78.6% retracement. Note that this is also the resistance of the Friday consolidation before the upswing.
- So if the Pound bears are stroung enought to drive this market further below this 1.5060 area, we might continue a decline in the intermediate term to 1.45. (Refer to Weekly Technical Update 3.5.2010)
- Otherwise, there are still some short-term rally possible, and looking at the 4H time-frame, we know the next area of resistance is near 1.53.
Fan Yang
Currency Analyst
Commodity Trading Advisor
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