GBP/USD Confirms Breakdown

\ 7:27 AM EDT \ January 28th, 2013
Forex Technical Update

GBP/USD 1H chart 1/28/2013 7:15AM EST

GBP/USD 1/28/2013 1H chart

Breakdown confirmation: The GBP/USD broke out of a short-term consolidation range last week. After the breakdown of the range, and a break below 1.58, there was some support around 1.5750 that produced a pullback. This pullback tested the lower part of the previous range, but eventually fell lower, starting the 1/28 US session with a test of the 1.57 area. This is the next psychological level to break to open up further downside. The RSI reflects persistent bearish momentum in development as it holds under 60 and continues to tag 30.

Downside, range: There is room to the downside all the down to 1.5260 area, near the lows in 2012, and basically the low of a large consolidation range since August 2010. However, in this larger degree look at the market, cable is directionless, and therefore the lower it goes, and the more oversold signals appear, the market likely it will revert back toward the middle of this range, roughly in the  1.5750 1.5850 area.

EUR/USD Daily chart 1/28/2013 (click for full size)

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.

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.

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