GBP/USD 4H Chart 8/6/2012 10:10AM EDT
The GBP/USD slid after Friday’s (8/3) sharp rally, which came after better-than-expected US NFP data. The market then found support heading into the 8/6 US session at a rising trendline connecting last week’s lows, around 1.5550. Also note that the 1H RSI reading mostly held above 40 after tagging 70 last week, a sign of some developing bullish momentum in the near-term.
The thing is, the market is trading sideways when you look at the bigger picture. Even in the 1H chart the moving averages are whipping back and forth. The 200-SMA is flat with price crisscrossing it. As the market rallies, it will also have to face a declining trendline connecting highs from 7/27 and 7/30. We already broke above a sharper declining trendline that was connecting highs throughout July.
The 4H chart below also shows a sideways market going back to June. The lowest range pivot is around 1.54, while a more common low was at 1.5460. To the upside, the range resistance is in the 1.5720-1.5770 area.
GBP/USD 4H Chart 8/6/2012 10:15AM EDT
Fan Yang CMT is a trader, educator and a Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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. FXTimes 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 analysis.