GBP/USD 1H Chart 7/11/2012 10:35AM EDT
The FOMC meeting minutes are due 2:00PM EDT. The market is seeing some risk-on, but before that release, the 1.56 level is a challenge. It is 50% retracement of July’s fall from 1.5726 to 1.5464, and the 200-Hour SMA. This basically represents mean price action, which means, an indecisive market should be pulled towards this area. Ahead of the FOMC, we can expect the market to be a bit indecisive.
On the other hand, the 1.5550 handle is probably going to provide some psychological support ahead of this event risk.
If the market is risk-on after the minutes, short-term target for this and the next session is the 1.5655 pivot area, up to the 78.6% retracement, which is in confluence with a declining trendline connecting the highs from June 20 and July 2.
To the downside, a risk-off market can push the GBP/USD back towards the 1.5460-70 area in the short-term, if it holds below 1.5550 after the reactions to the FOMC minutes. Note the already bearish momentum bias in the 4H chart if the market keeps the RSI under 60 after it had tagged 30. Bearish continuation exposes a key support in the 1.5240-1.5280 area.
GBP/USD 4H Chart 7/11/2012 10:37AM EDT
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.
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