GBP/USD Daily Chart 11/27/2012 3:17PM EDT
Consolidation channel resistance: Following up with the previous update on GBP/USD, it was rallying sharply on 11/23. If it continued, it would be about to crack the consolidation channel seen in the daily chart, if it broke above 1.61. Instead, a couple days of indecision occurred just below 1.0650, and the falling channel resistance is coming down to meet price action. We noted that the market since June has been bullish, so there is a bullish bias in the medium term, but will the short-term market be able to break the consolidation channel that started from September’s high of 1.63? A break above the consolidation channel first targets this 1.63 high, and exposes the 2011 highs at 1.6621 and 1.6748.
Double top: When looking at the 4H chart we see that the market has been in a sideways consolidation since reaching 1.6050 last Friday (11/23). Cable has been trading between 1.5995 and 1.6050, forming what could be a double top if the support breaks. A break below 1.5995 opens up a bearish outlook, to be tested by a short-term rising trendline, as shown in the 4H chart. A break below this trendline puts away the bullish outlook for the moment, and a break below the 1.5927 pivot would provide additional clue of a bearish continuation in the short-term. There is still room toward 1.5780 or 1.58 before testing the key trendline support that goes back to June’s low of 1.5265.
GBP/USD 4HChart 11/27/2012 3:25PM 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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