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