- Daily: The GBP/USD, like the EUR/USD, is showing signs of reversal, though not as aggressive. The Sterling looks weaker based on price action leading into the US session.
- However, if the market closes above 1.56 today, there might be some further correction rally.
- Looking at the Daily, the retracement can go to 38.2%, or 1.5880 area.
- 4H: Before that, the market must go through an important support it just broke – the 1.57 support. In the 4H chart, this is the 38.2% retracement area. If broken, the 61.8% retracement coincides with the daily’s 38.2%, at the 1.5860-1.5880 area.
- Weekly: As with the EUR/USD, the GBP/USD has more decline to go. The stochastic shows strong bearish momentum, and the 50% retracement is at 1.5260-1.53. After short-term retracement, this may be the next level of support.
- Refering back to the possible wave count, if the market stays above 1.50, and a rally ensues, that might be the 5th wave of the rally since February 2009.
- Otherwise (if market continues to decline below 1.50), we may already have completed wave 5, as a truncation, and this is a major ABC corrective wave that started Sept. 09.
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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