- 4H: The GBP/USD was showing strong reversal signals, yesterday breaking below 1.62. (Refer to Daily Video Technical Update 1.21.2010). In the Asian session and early European session, the market had a throwback from 1.6130 to 1.6270 before a heavy drop leading into the US session.
- The throwback confirms bearish mode, but we may end the week seeing support at the the channel support level near 1.6050. The stochastic might develop a bullish divergence if this area holds. The market is also at the 61.8%-78.6% retracement zone.
- Daily: The daily shows three consecutive sessions of strong bearish action. It looks poised to continue next week.
- With this in mind, looking back at the 4H chart, a rally from the 1.6050 level should be expected as a correction rally. The bearish projection in the short/intermediate term is still the 1.57-1.58 area.
Fan Yang
Currency Analyst
Commodity Trading Advisor
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